Shares of Larsen & Toubro (L&T) were trading lower on November 5, following its acquisition of a 21% stake in E2E Networks Ltd for ₹1,407.02 crore. E2E Networks, based in Delhi, is a cloud services provider in India. This acquisition will enhance L&T’s presence in cloud and AI services, which are critical growth sectors in technology.
In a regulatory filing, L&T revealed it had entered into an investment agreement on November 5 to acquire this stake. The company will invest ₹1,079.27 crore for a 15% stake through a preferential allotment and ₹327.75 crore for an additional 6% stake via a secondary acquisition. The completion of this acquisition is expected by December 31.
L&T will remain a minority shareholder in E2E Networks and not gain control over the company, though it will have certain protective rights. This investment aligns with L&T’s strategy to tap into the rapidly growing AI and cloud service markets.
Alongside the acquisition, L&T plans to enter into several agreements with E2E Networks, including a software license agreement, reseller agreement, and colocation agreement, enhancing their collaborative potential.
Last week, L&T reported a 5% increase in consolidated profit after tax for the September 2024 quarter, reaching ₹3,395 crore, up from ₹3,223 crore in the same period last year. The company’s consolidated income rose significantly to ₹62,655.85 crore, though expenses also increased to ₹57,100.76 crore from ₹47,165.95 crore.
