Tejas Networks zooms 6% on executing ₹7,492 cr worth contract with TCS
Tejas Networks Ltd surged over 6% today after the company executed the master contract worth ₹7,492 crore with IT services major Tata Consultancy Services (TCS) towards supply, support, and annual maintenance services for 4G/5G radio access networks (RAN) equipment of BSNL’s pan-India 4G-5G network across over 100,000 sites. Tejas Networks is a part of the Tata Group, with Panatone Finvest Ltd, a subsidiary of Tata Sons, being the majority shareholder.
The project will be executed by the company during the calendar years 2023 and 2024, while the support and maintenance services will be for a period of 9 years post-warranty period.
"PO received towards the supply of the equipment amounting to ₹7,492 crore (excluding GST). Support and maintenance services PO will be issued subsequently to the Company as per the Master Contract," Tejas Networks says in a stock exchange filing.
Tejas Networks shares opened gap up at ₹867, against the previous session close of ₹815.05, and surged to an intra-day high of ₹869, before settling at ₹848.35, up 33.30 points or 4.09% by 12.03 PM.
At the current share price, the shares are quoting a tad lower than the 52-week-high of ₹893 achieved on July 20, 2023. Its market cap also increased to ₹14,400.34 crore.
The Tejas Networks' master contract with TCS is towards the supply of goods against the agreed bill of material and rendering of support or services by the company in line with BSNL requirements.
The supply of goods and rendering of services under the respective purchase order issued by TCS to the company will be for a duration starting from the date of issuance and will expire on the delivery time schedule agreed unless it's terminated earlier.
The price for the goods to be supplied and services to be performed and agreed payment terms are set out in the master contract.
The company will be entitled to a mobilisation advance post the receipt of the same by TCS from BSNL. The percentage of the amount towards the mobilisation advance will be as per the agreement between the parties.
Notably, TCS is a subsidiary of Tata Sons Private Limited, which is also the ultimate holding company of Tejas Networks, and both are related parties. "The transactions are entered between related parties which are at arm’s length and in the ordinary course of business," the company informs.
Anand Athreya, CEO and Managing Director of Tejas Networks says the company is delighted to be selected as the sole supplier of 4G/5G RAN equipment for one of the largest mobile networks in the world. "Our cutting-edge portfolio of baseband and radio products will enable BSNL to roll out a scalable and cost-effective network that meets world-class performance and quality standards."
Kumar N Sivarajan, CTO of Tejas Networks says the company's state-of-the-art 4G/5G RAN products were subjected to rigorous field testing by BSNL for nearly 18 months before being chosen for this large-scale commercial deployment. "This win is a true testament to the engineering excellence and innovation prowess of our R&D team that successfully developed and delivered an industry-leading product in a complex technology area in record time.”
Tejas Networks designs and manufactures high-performance wireline and wireless networking products for telecommunications service providers, internet service providers, utilities, defence and government entities in over 75 countries.