Shares of E2E Networks Ltd hit 5% upper circuit and a 52-week high of Rs 4,977.50 on Tuesday, 5 November, after the company announced that engineering and infrastructure giant Larsen & Toubro (L&T) is planning to acquire a 21% stake in the company.

L&T said in an exchange filing earlier today, “The company proposes to acquire a total of 4,171,410 equity shares of E2E Networks (comprising an aggregate 21% of the capital).”

A total of Rs 1,079.27 crore will be invested by L&T, which will receive 2,979,579 preferred shares of E2E Networks, or 15% of the company, at Rs 3,622.25 per share. Additionally, it would pay a founder Rs 2,750 per share, or Rs 327.75 crore, to purchase an extra 6% ownership in E2E Networks, which includes 1,191,831 equity shares.

L&T will have certain protective rights as a minority shareholder in E2E Networks after this purchase. Additionally, the construction giant will be able to propose up to two directors to the eight-member board of E2E Networks, three of whom must be independent.

It is anticipated that the all-cash transaction will be finalised by 31 December 2024.

E2E Networks functions as an infrastructure cloud and AI/ML/GenAI cloud platform with GPU-as-a-service solutions designed for mid-sized businesses, startups, research institutes like IITs and IIITs, and fintech companies spanning ten countries

Important OEMs such as NVIDIA, Intel, AMD, HPE, Microsoft, and Dell are part of the company’s strategic partnerships.

L&T stated in an exchange document outlining the acquisition’s justification, “The acquisition is complementary to the market approach in the fast-growing areas of AI and cloud services. Along with the acquisition, the company also proposes to enter into a software licence agreement, reseller agreement, and colocation agreement with E2E Networks.”

Over the past year, the stock has increased by 871%, from Rs 493.5 to Rs 4,977.5 per share. It has increased 341.5% over the last six months and 186% over the last three months.

The stock has risen more than 61% in the past month alone, despite general market weakness. 

At 1:32 pm, the shares of E2E Networks were locked 5% higher at Rs 4,977.50 on NSE.

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