L&T Caps Secondary Stake Buy in E2E Networks at 2.98%, Refines Strategic Cloud Play

Larsen & Toubro (L&T) has announced it will limit its secondary acquisition of shares in E2E Networks Ltd from the company’s promoters to 2.98%, refining its previously planned purchase as part of a broader strategic investment in the AI-focused cloud services firm.

 

Key Highlights:

 

Stake Acquisition Adjusted: L&T had initially set out to acquire up to a 21% stake in E2E Networks-15% through a preferential allotment (already completed in December 2024) and up to 6% via secondary purchase from promoters. The company has now decided to limit this secondary acquisition to 2.98% instead of the full 6%, signaling a more measured approach to its incremental investment.

 

Strategic Rationale: E2E Networks is a leading Indian cloud platform specializing in CPU and GPU-based cloud computing, with strategic alliances with global tech giants such as NVIDIA, Intel, AMD, Microsoft, and Dell. L&T’s investment aims to strengthen its presence in cloud and AI services, key growth areas in the technology sector.

 

Financial Details: The total planned investment for the full 21% stake was ₹1,407 crore, with ₹1,079.27 crore for the 15% preferential allotment and ₹327.75 crore earmarked for the secondary acquisition. The revised 2.98% cap on the secondary buy will reduce the overall outlay and maintain L&T as a significant, but minority, shareholder.

 

Governance and Rights: As part of the deal, L&T retains the right to nominate up to two directors on E2E Networks’ board, ensuring strategic influence without full control.

 

Market Impact: The move comes as E2E Networks’ stock has delivered multibagger returns over the past year, and the partnership is expected to accelerate the adoption of GenAI solutions and advanced cloud technologies in India.

 

L&T’s recalibrated acquisition underscores a focused, risk-managed approach to expanding its digital and AI footprint while leveraging E2E Networks’ expertise and ecosystem partnerships.

 

Source: CNBC TV18, BlinkX, Techcircle, Business Standard, DSIJ, Economic Times