HBL to acquire 34-35% stake in defence applications startup Tonbo Imaging for 150Cr via CCPS. Tonbo is into developing electro-optics solutions for defence applications. The implied acquisition valuations for Tonbo are 8.7x FY23E sales. Tonbo’s investors include Qualcomm and Edelweiss.
As per this old article on Tonbo, the company has a large sales pipeline and immediate order visibility. However the nos mentioned in the article (2400Cr of immediate visibility orders) have far from translated in the current revenues (FY23 9M revenues 37Cr). So most of this story is still one of potential. HBL hasn’t mentioned in the disclosure whether the company makes profits or losses.
This is perhaps another example of aggressive/adventurous capital allocation by HBL, ploughing in 16-17% of its net worth into an exciting but yet to scale technology company. In the past, Management themselves have admitted that their capital allocation has been more adventurous than warranted (Beautifully captured in the stock story). Will it be different this time or the same old? Investors are probably hoping that management doesn’t plough capital into another 10Y horizon business 
Another bit of information that may or may not be relevant to the investment thesis is that Tonbo Imaging has come under the scanner along with the likes of BEL for supplying military technology to the Myanmar junta.
Disc: Have a small position in HBL.