Shares of Tejas Networks Limited (TNL) snapped their two-week winning streak after they froze at 5 per cent lower circuit at Rs 578, falling 10 per cent from their intra-day high on the BSE on Monday.
The stock of Tata Group company hit a record high of Rs 578.45 in intra-day today and has zoomed 52 per cent in the past two weeks. It surpassed its previous high of Rs 570.20 touched on October 5, 2021.
Till 12:04 pm; a combined 1.2 million equity shares changed hands with pending sell orders at around 180,000 shares on the NSE and BSE. In comparison, the S&P BSE Sensex was down 0.50 per cent at 59,147 points.
TNL is a leading company in India’s optical networking market. The company’s products have been deployed by leading telecommunications operators in India, such as Bharti Airtel, Reliance Jio, Vodafone-Idea, Tata Communications, Tata Tele services, Bharat Sanchar Nigam (BSNL) among many others.
Further, large public sector utilities such as Power Grid Corporation of India, RailTel Corporation of India, Indian Oil Corporation, Oil India, Delhi Metro, and Gas Authority of India have been the company’s customers for many years.
Meanwhile, rating agency ICRA upgraded the long term and short term instruments of the company. Highlighting the rationale behind the upgrade, ICRA said, "Panatone Finvest Limited (PFL) entered into a definitive agreement with TNL in July 2021 for a controlling stake. Later, PFL acquired a 37.7 per cent stake in TNL in the fourth quarter of FY22 (Q4FY22), leading to an inflow of Rs. 837.5 crore (including Rs. 337.5 crore received against share warrants). Further, the company plans to increase their shareholding in TNL later"
The rating upgrade also takes into account the financial flexibility emanating from the strong parentage of PFL, which is a subsidiary of Tata Sons Private Limited (TSPL) and an investment holding company of the Tata Group’s investment in telecommunication.
Further, the ratings draw comfort from TNL’s healthy order book, strong track record in the industry and its long-term relationship with some large clients. "The Atmanirbhar Bharat Abhiyan of the Government of India (GoI), which is aimed at limiting import dependence and increasing demand for indigenous products also provides better growth opportunities for the company. Further, TNL Production Linked Incentive (PLI) scheme application for telecom manufacturing has been approved by Department of Telecom, Government of India," ICRA said in a report.
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