Tejas Networks Limited , a prominent player in the Indian telecommunications equipment sector, has taken a significant step towards enhancing employee ownership and engagement. The company allotted 289,790 equity shares to eligible employees under various stock option plans, as disclosed in a recent corporate filing.

Details of the Allotment

The allotment of shares was executed under three distinct employee stock option plans:

Impact on Share Capital

This strategic move has led to an increase in the company's paid-up share capital:

• Previous Capital: ₹176.87 crores (17.69 crore equity shares)
• New Capital: ₹177.16 crores (17.71 crore equity shares)

The increase of ₹0.29 crores in the paid-up capital reflects the company's commitment to aligning employee interests with those of the shareholders.

Implications for Stakeholders

This allotment of shares under employee stock option plans serves multiple purposes:

1. Employee Retention: By offering equity ownership, Tejas Networks aims to retain talent and foster a sense of belonging among its workforce.
2. Performance Incentive: Stock options can act as a motivator for employees to contribute to the company's long-term success.
3. Alignment of Interests: Employee ownership helps align the interests of the workforce with those of other shareholders, potentially leading to improved company performance.

While this move dilutes existing shareholdings slightly, it's generally viewed as a positive step as it can lead to a more engaged workforce.

Investors and market watchers may observe how this increased employee ownership translates into Tejas Networks' operational performance and market position in the telecommunications equipment sector.

Note: This corporate action is part of Tejas Networks' strategy to attract, retain, and motivate key talent in the organization.

Tejas Networks , a leading telecom equipment manufacturer, reported a mixed financial performance for the second quarter. While the company saw a significant increase in revenue, it also faced substantial losses due to various provisions and charges.

Financial Highlights

The company's revenue mix remained consistent with the previous quarter, with 79% coming from India and 21% from international markets. However, the order book composition showed a strong domestic focus, with 93% of orders from India and only 7% from international markets.

Key Developments

1. BSNL 4G Network: Tejas Networks played a crucial role in the launch of BSNL's nationwide 4G network, with 97,500 cell towers now running on Tejas' 4G RAN products. The network is carrying 4 petabytes of daily data traffic and serving 26 million active subscribers.

2. New Product Launches: At the Indian Mobile Congress, Tejas unveiled its new 64T64R massive MIMO radio and a state-of-the-art 1.2 Tbps DWDM transmission system.

3. International Expansion: The company won multiple 400-gig deployments for customers in India, Europe, Cambodia, Ghana, and Nigeria. It also deployed its first 10-gig CPON solution in Europe.

4. Board Addition: Dr. Randhir Thakur, CEO and MD of Tata Electronics, joined Tejas Networks' Board as a non-executive and non-independent Director, bringing over 40 years of semiconductor industry experience.

5. Innovation Recognition: Tejas was shortlisted as a finalist for the "2025 Network X Awards" in Paris for its "Intelligent Alien Wavelength Solution."

Financial Challenges

The quarter's loss of Rs 307 crore included Rs 190 crore in provisions, primarily consisting of:

• Rs 145 crore for inventory obsolescence and write-downs
• Rs 44 crore for warranty expenses

These provisions were attributed to contract manufacturing process losses, design changes, and potential fault rates in the field.

Balance Sheet Overview

The company collected Rs 700 crore in receivables during the quarter. The high level of receivables is largely due to the BSNL 4G order, with collections linked to specific milestones expected over the next 2-3 quarters.

Future Outlook

Despite the current financial challenges, Tejas Networks' management remains optimistic about the company's future. They cited ongoing technology transitions and expanding market opportunities in both wireless and wireline segments as key drivers for growth. The company continues to invest heavily in R&D and sales expansion, focusing on developing cutting-edge 5G and 6G technologies while also addressing the growing demand for high-bandwidth connectivity in data centers.

As Tejas Networks navigates through its current financial situation, the company's ability to capitalize on its technological advancements and expand its market presence will be crucial for its long-term success in the highly competitive telecom equipment industry.