Ashish Kacholia portfolio stock up 1645% in 15 months; L&T to buy 21% stake

Shares of E2E Networks were locked in the upper circuit for the seventh straight trading session, up 5 per cent at Rs 4,977.50 on the National Stock Exchange (NSE) in Tuesday’s intra-day trade after the engineering giant Larsen & Toubro (L&T) proposed to acquire up to 21 per cent stake in the company for Rs 1,407 crore.

 

The stock is only listed on the NSE and trading under the SME segment. Till 09:53 am; around 55,000 equity shares changed hands and there were pending buy orders for 14,755 shares on the NSE, the exchange data shows. The company made its stock market debut on May 15, 2018, with an issue price of Rs 57 per share.

 

In the last eight trading days, the stock price of E2E Networks has surged 48 per cent. In one month, it has rallied 70 per cent, as compared to 3 per cent decline in the Nifty 50. Since September 2, in the last nine weeks, the market price of E2E Networks has more-than-doubled or zoomed 113 per cent from a level of Rs 2,331.95.  Thus far in the calendar year 2024, the stock skyrocketed 621 per cent, as against a 10 per cent rise in the benchmark index. In the past 15 months, E2E Networks has appreciated over 17 times or 1,644 per cent from a level of Rs 285.30 on August 4, 2023.

 

As on September 30, 2024, investor, Ashish Kacholia held 177,043 shares representing 1.05 per cent stake in the company, the shareholding data shows.

 

L&T in an exchange filing today informed that the company has entered into an Investment Agreement on November 5, 2024 for acquisition of up to 21 per cent stake in E2E Networks.

 

L&T proposes to acquire a total of 4.17 million equity shares of E2E Networks (comprising of an aggregate 21 per cent of the capital) through preferential allotment and secondary market acquisition.

 

L&T will make an investment via preferential allotment for 15 per cent stake in E2E Networks, comprising of 2.98 million equity shares of E2E Networks, for Rs 1,079.27 crore at Rs 3,622.25 per share. The engineering major shall make an investment via secondary acquisition of 6 per cent stake, comprising of 1.19 million equity shares in E2E Networks from the founder for Rs 327.75 crore at Rs 2,750 per share.

 

The company will not acquire control in E2E Networks pursuant to the proposed acquisition and will be a minority shareholder with certain protective rights, L&T said.

 

E2E Networks specializes in providing CPU and GPU-based cloud computing platforms, to help its customers carry out large scale general and AI-workloads by leveraging its relationship with NVIDIA.

 

E2E Networks has formed strategic alliances with major OEMs, including NVIDIA, Intel, AMD, HPE, Microsoft, and Dell. Leveraging open-source technologies, E2E Networks has developed proprietary virtualization and cloud management software solutions (IP), creating scalable systems that support long-term customer needs.

 

The acquisition is complementary for 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 license agreement, reseller agreement and colocation agreement with E2E Networks, L&T said in a statement.