Panatone Finvest, a subsidiary of Tata Sons, is acquiring 43.35 per cent in Tejas Networks, a global optical, broadband and data networking products company, for Rs 1,850 crore.

The multi-step deal will also see Panatone and some other companies of the Tata group make an open offer to acquire up to 4.03 crore equity shares of Tejas Networks, or 26 per cent of its emerging voting capital.

As part of the agreement, Bangalore-based Tejas will make a preferential allotment to Panatone Finvest of 1.94 crore equity shares at a price of Rs 258 per share, aggregating Rs 500 crore.

It will also issue 3.68 crore warrants (Series A warrants), each carrying a right to subscribe to one equity share at an exercise price of Rs 258 per share, aggregating Rs 950 crore.

Tejas said Panatone can exercise the rights in one or more tranches over 11 months from the date of the allotment of the warrants.

Panatone will be allotted another 1.55 crore warrants (Series B warrants), each carrying a right to subscribe to one equity share at an exercise price of Rs 258 per equity share, aggregating to Rs 400 crore.

These warrants may be exercised in one or more tranches after 12 months of their allotment and till the 18th month.

In a regulatory filing, Tejas said the Tatas will pay in cash for the preferential shares.

The subscription share price will be payable at the time of subscription and the allotment of the shares.

In warrants, the Tatas will pay 25 per cent of the warrant exercise price on their subscription and allotment, while the rest will be paid at the time of the allotment of the equity shares.

Panatone will also acquire up to 13 lakh shares from the Tejas management at a price not exceeding Rs 258 per equity share aggregating Rs 34 crore, subject to such terms and conditions as mutually agreed between the parties, the company disclosed.

Shares of Tejas Networks on Thursday got locked at the upper circuit on the announcement of the news. On the BSE they closed at Rs 246 — a gain of Rs 11.70 or 4.99 per cent.

“This association provides us the necessary financial resources, global relationships and strong ecosystem to innovate and scale our business,’’ Tejas Networks chairman V. Balakrishnan said while commenting on the development.

Tejas said it sees a very large opportunity in 5G and fiber-based broadband rollouts. Tejas Networks CEO and MD Sanjay Nayak and the rest of the management team will stay on with the company.