 "Tejas Networks resumes IPO plan")
In the financial year ended March 31, 2016, the company supported by private equity investors such as Goldman Sachs, Sandstone Capital and Mayfield, crossed the $100-million- mark in revenues, posting its best ever growth, on the back of strong demand in India and abroad.
“Last year (VY16), we recorded 60% y-o-y growth, our highest so far, to post revenues of Rs 674 crore. We are profitable on the PAT basis and growing to the point that we might do an IPO this financial year,” Sanjay Nayak, Tejas’ co-founder who is also the chief and managing director at the company told Business Standard.
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He said, the company would launch the process for the IPO soon. “Usually, the process takes six to nine months. But, we are fairly ready. We are also a venture-funded company which means that our data is almost ready. Our auditor is one of the big fours. So, the main factor for us is when our business is ready... and I think we are getting there now,” added Nayak.
“Not just that, I think the market is still waiting for (the IPO of) India’s first real product tech company.”
Of the Rs 674 crore in revenues Tejas did last year, around 35% of that came through exports. Nayak said even though a growth rate of over 60% would be difficult to sustain, “We definitely are going to grow 30% y-o-y for the next five years.”
One of the early successes out of India in the hardware product space, Tejas Networks’ performance since 2009 had been quite tough owing to a host of external factors. The firm was almost ready for an IPO after hitting $100 million in revenue in 2008-09 when the market went for a toss post the Lehman Brothers collapse followed by shrinking global demands. This was followed by Nortel, one of its largest clients then, filing for bankruptcy. The worst was however yet to come when the 2G scam surfaced almost completely wiping out demand from the government space, especially from state-owned BSNL.
Nortel and BSNL together were accounting for almost 75% of its revenues that time. By FY12, Tejas’ revenue came down to Rs 200 crore from around Rs 650 crore in FY09, forcing the company to reposition itself with increased focus on R&D.
“We did not raise any external money. The last money we raised was in 2007 from Goldman Sachs (around Rs 96 crore). So we preserved that cash. We invested the money in R&D, build new technologies, expanded our addressable market and turned the company around,” said Nayak. Last three years cumulatively, Tajas invested around 30-35% of its revenues in an average on R&D.
More ever, he said, Tejas is a much healthier company today than ever in the past owing to its revenue mix, diversity in market presence and client concentration. “So because of the customer and geographical diversification, today Tejas is far healthier, far stronger company and much more insulated than ever before. As entrepreneurs, this is what we were aspiring for and built.”
Nayak, a former MD of Synopsys who along with Kumar Sivarajan and Arnob Roy founded Tejas in 2000 under active guidance of Deshpande. While Sivarajan, a an alumnus of IIT, Madras and a PhD from the California Institute of Technology is currently chief technology officer (CTO) of Tejas, Roy heads Engineering.
“Apart from a business, we take Tejas like a mission. India needs to create its own Cisco, its own Google and Microsoft, in deep technology. We have spent 15 years doing this. We have survived the ups and downs. The fact that we have come out stronger now, this is real entrepreneurship, this is real hard and tough.”