Larsen & Toubro (L&T) Tuesday announced a deal to acquire a 21% stake in AI-focused hyperscale cloud platform E2E Networks Ltd for Rs 1,407 crore in a mix of primary and secondary transactions.
Delhi-based E2E Networks, in which Blume Venture invested in 2013 and exited five years later, specialises in providing cloud computing services, particularly utilising central processing unit (CPU) and graphics processing unit (GPU) resources in relationship with NVIDIA.
The acquisition will be split into two parts: L&T will initially invest Rs 1,079.27 crore to acquire a 15% stake through a preferential allotment. Subsequently, an additional 6% stake will be purchased for Rs 327.75 crore from founders.
The deal is expected to conclude by December 31, 2024, L&T said in an exchange filing.
Despite its substantial investment, L&T will remain a minority shareholder in E2E Networks, holding protective rights but not full control, it said.
E2E’s revenue had risen to Rs 94.46 crore in FY24 from Rs 66.20 crore in FY23 and Rs 51.87 crore in the FY22. This implies a valuation of over 70 times the FY24 turnover.
The deal enables L&T to leverage E2E Networks' expertise in artificial intelligence (AI) and cloud solutions, reinforcing its ambitions to lead in the high-demand cloud infrastructure sector, it said.
E2E Networks Ltd had raised about $50 million in August, led by homegrown private equity firm Paragon Partners.
This partnership with L&T is expected to further accelerate E2E Networks' growth, positioning both companies to tap into India’s expanding demand for AI and cloud capabilities.
