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Initial Public Offer - Note

Issue Highlights:

Issuer: Tejas Networks Limited

Issue Type: 100% Book Built Issue IPO

Issue Open: Wednesday, June 14, 2017

Issue Close: Friday, June 16, 2017

Issue Size (Rs)*: Equity Shares Aggregating up to Rs.450

Crores (“FRESH ISSUE”) and an offer for sale up to 12,711,605

Equity Shares.

Face Value: Rs.10 per Equity Share

Price Band: Rs. 250 – Rs. 257 per Equity Share

Minimum Order Quantity Retail: 55 Shares and in

multiples thereafter

Maximum Bid amount for Retail: Rs. 2 Lakhs

Listing: NSE & BSE

Issue Size and Investor Category Allocation

Total Issue Size: 3,02,21,332 Equity Shares*

QIB: 75% of the issue size (2,26,65,999 Equity Shares*)

HNI: 15% of the issue size (45,33,200 Equity Shares*)

Retail Individual Bidders: 10% of the issue size (30,22,133

Equity Shares*)

(* upper price band)

Book Running Lead Managers:

Axis Capital, Citigroup, Edelweiss Financial Services, Nomura

Registrar:

Link Intime India Pvt Ltd

Key Business Strategies:

Continue investments in innovations focused on the high

growth optical networking segments

Expand into newer and adjacent product areas

Continue to strengthen our leadership position in India

Expand global sales network in emerging and selected

developed markets

Key Strengths:

Our end-to-end portfolio of optical networking products

positions us well to take advantage of the expected

industry growth

Leadership in the fast growing Indian optical equipment

market

Track record and culture of innovation leading to product

and technology leadership

Software-defined hardware with ease of use

Cost and capital efficient business model

Long standing customer relationships with strong repeat

business

Strong professionally managed team with significant

industry experience

Objects of the Issue:

1. Capital expenditure towards payment of salaries and wages of

our research and development team

2. Working Capital Requirement

3. General Corporate Purpose.

Public issue of 3,02,21,332 equity shares of Rs. 10/- each

(“equity shares”) of Tejas Networks Ltd (Company or Issuer).

About the Issuer:

It is a India-based optical and data networking products company

with customers in over 60 countries. It designs, develops and sells

high-performance and cost-competitive products to

telecommunications service providers, internet service providers,

utility companies, defence companies and government entities

(collectively, “Communication Service Providers”).

Its products are used to build high-speed communication networks

that carry voice, data and video traffic from fixed line, mobile and

broadband networks over optical fibre. These products utilize

programmable software-defined hardware architecture with a

common software code-base that delivers an app-like ease of

development and upgrades of new features and technology

standards.

For the year ended March 31, 2016, it was the second largest optical

networking products company in terms of market share in India,

with a market share of 15% in the overall optical networking

market.

The consolidated restated revenues from operations (net) for the

Fiscal Years 2014, 2015 and 2016 and the six months ended

September 30, 2015 and the six months ended September 30, 2016

were Rs.4,230.55 million, Rs.3,868.26 million, Rs.6,274.57 million,

Rs.2,079.01 million and Rs.3,507.75 million, respectively.

Revenue from Operations (Rs. Millions)

Net Profit After Tax (Rs. Millions)

3692.714230.55 3868.26

6274.57

0

2000

4000

6000

8000

FY 13 FY 14 FY 15 FY 16

-790.43

27.77

-178.66

290.05

-1000

-800

-600

-400

-200

0

200

400

FY 13 FY 14 FY 15 FY 16

Tejas Networks Ltd

Tejas Networks Ltd

Call Toll Free 1800-425-8282

(` in Million)

Initial Public Offer - Note

Tejas Networks Ltd

Tejas Networks Ltd

SUMMARY STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED

Particulars As at

September 30,

2016

March 31,

2016

September 30,

2015

March 31,

2015

March

31, 2014

March

31, 2013

March

31, 2012

EQ UITY AND LIABILITIES

Shareholders’ fundsShare capital

721.38 665.23 1,255.31 1,255.31 1,009.79 1,009.79 615.46

Reserves and surplus 3,745.61 3,030.84 2,176.73 2,165.85 2,331.43 2,278.71 3,044.40

4,466.99 3,696.07 3,432.04 3,421.16 3,341.22 3,288.50 3,659.86

Non-current liabilities

Long-term borrowings

290.00 290.00 50.00 50.00 300.00 30.00 -

Other long-term liabilit ies - - - - 4.35 1.75 -

Long-term provisions 23.80 19.64 15.09 14.24 15.92 25.64 30.88

313.80 309.64 65.09 64.24 320.27 57.39 30.88

Current liabilitiesShort-term borrowings 658.78 2,174.36 1,894.63 2,090.52 2,179.13 1,768.96 1,655.90

Trade payables

Total outstanding dues to microenterprises and small enterprises

- - - - - - -

Total outstanding dues to

creditors other than micro

enterprises and small enterprises

1,262.53 1,998.03 1,116.59 1,226.74 1,418.64 1,136.97 734.79

Other current liabilit ies 96.58 152.19 306.00 303.87 119.42 54.90 46.72

Short-term provisions 32.62 28.68 21.10 19.57 19.73 10.08 11.37

2,050.51 4,353.26 3,338.32 3,640.70 3,736.92 2,970.91 2,448.78

TO TAL 6,831.30 8,358.97 6,835.45 7,126.10 7,398.41 6,316.80 6,139.52

ASSETS

Non-current assetsFixed assets

Tangible assets 287.33 290.99 253.76 260.91 289.70 132.44 87.35

Intangible assets 481.46 651.91 500.88 247.81 356.01 634.54 532.16

Tangible Capital work-in-

progress

- - 1.32 - 2.13 -

Intangible assets under

development

639.22 524.67 696.63 883.36 843.23 717.66 759.86

Non-current investments 45.89 45.89 45.89 45.89 45.88 45.67 587.54

Long-term loans and advances 477.34 558.10 555.23 543.84 535.82 486.33 460.14

Other non-current assets 354.05 316.22 22.02 30.23 340.07 8.56 1.61

2,285.29 2,387.78 2,074.41 2,013.36 2,410.71 2,027.33 2,428.66

Current assets

Current investments - - - - - - 158.57

Inventories 1,882.86 2,315.81 2,294.59 2,221.95 2,083.11 2,007.22 2,029.82

Trade receivables 1,920.34 2,491.37 1,404.68 1,947.18 2,174.01 1,263.74 740.93

Cash and Bank balances 317.08 690.46 491.31 478.84 220.19 554.19 256.88

Short-term loans and advances 301.27 323.08 333.29 249.45 347.70 416.96 499.38

Other current assets 124.46 150.47 237.17 215.32 162.69 47.36 25.28

4,546.01 5,971.19 4,761.04 5,112.74 4,987.70 4,289.47 3,710.86

TO TAL 6,831.30 8,358.97 6,835.45 7,126.10 7,398.41 6,316.80 6,139.52

Call Toll Free 1800-425-8282

Source

for

Note:

DRHP

IMPORTANT: Please

read

the

Red

Herring

Prospectus

of this

issue

carefully

before

investing

in

the

same.

:: Research Desk :: :: Research Desk ::

E-mail:

karvy.advisor@karvy.com

Direct Ph: 040 3321 7132

Disclaimer

The information and views presented in this report are prepared by Karvy Stock Broking Limited. The information

contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the

accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss

incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors.

Investors must make their own investment decisions based on their specific investment objectives and financial position

and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned

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document.

PF/IPON/07062017/27

(` in Million)

Initial Public Offer - Note

Tejas Networks Ltd

Tejas Networks Ltd

SUMMARY STATEMENT OF PROFITS AND LOSSES, AS RESTATED

Particulars For half year ended For the year ended

September 30, 2016

September 30, 2015

March 31, 2016

March 31, 2015

March 31, 2014

March 31, 2013

March 31, 2012

INCO MERevenue from operations (gross) 3,648.78 2,162.28 6,725.71 4,060.99 4,119.87 2,921.33 1,918.31

Less: Excise duty 187.94 90.61 470.37 202.66 172.57 171.52 111.45

Revenue from operations (net) (A) 3,460.84 2,071.67 6,255.34 3,858.33 3,947.30 2,749.81 1,806.86

EXPENS ESCost of materials consumed 2,122.08 1,074.81 3,548.50 2,040.10 1,859.24 1,364.12 990.67

Employee benefits expense 357.72 284.17 634.18 477.18 430.89 429.82 528.23

Other expenses 435.63 339.92 964.31 656.25 713.63 493.54 451.44

Total expenses (B) 2,915.43 1,698.90 5,146.99 3,173.53 3,003.76 2,287.48 1,970.34

Restated Earnings before exceptional

items, interest, tax, depreciation and

amortisation (EBITDA) (A - B)

545.41 372.77 1,108.35 684.80 943.54 462.33 (163.48)

Finance Cost (180.82) (246.97) (485.69) (459.21) (441.60) (334.47) (373.27)

Depreciation and amortisation expense (278.02) (143.03) (382.43) (485.51) (558.46) (480.29) (443.14)

Other Income 35.30 28.11 34.73 94.34 109.24 128.61 186.64

Restated Profit / (Loss) before

exceptional items and tax

121.87 10.88 274.96 (165.58) 52.72 (223.82) (793.25)

Exceptional itemsProvision for diminution in the value of

long term investments

- - - - - (541.87) -

Restated Profit / (Loss) before tax 121.87 10.88 274.96 (165.58) 52.72 (765.69) (793.25)

Tax expense

Current tax expense for current year - - - - - - -

Deferred tax - - - - - - -

Restated Profit / (Loss) for the year 121.87 10.88 274.96 (165.58) 52.72 (765.69) (793.25)

Earning per share (Par Value Rs. 10

each)

(a) Basic 1.87 0.18 4.46 (2.69) 0.86 (12.44) (12.89)

(b) Diluted 1.87 0.18 4.13 (2.69) 0.86 (12.44) (12.89)