Shares of this small-cap stock in the IT networking equipment and software sector surged by 5 percent to reach the upper circuit at Rs.4,977.50 per share, hitting a 52-week high on Tuesday morning. The jump followed news that L&T plans to acquire a 21 percent stake in the company for Rs.1,407 crore.
Share Price Movement
During Tuesday’s trading session, E2E Networks Ltd’s share price reached a 5 percent upper circuit limit of Rs.4,977.50 per share, marking a 52-week high compared to the previous close of Rs.4,740.50. In the past year, the stock has provided returns of over 850 percent.
What Happened
E2E Networks Ltd. announced that Engineering and Infrastructure Conglomerate Larsen & Toubro Ltd. (L&T) will acquire up to a 21 percent stake in the company through a preferential issue of shares, as detailed in an exchange filing on November 5.
L&T will initially receive 29.79 lakh equity shares, each with a face value of Rs.10, priced at Rs.3,622.25 per share, amounting to Rs.1,079 crore in total. This issue price represents a nearly 24 percent discount compared to E2E Networks’ closing price on Monday.
The initial acquisition will allow L&T to purchase up to a 15 percent stake through this preferential issuance. In addition, L&T plans to acquire a secondary stake of 6 percent for a total investment of Rs.328 crore, with these shares being purchased at Rs.2,750 each, reflecting a 43 percent discount from the Monday closing price of E2E Networks.
Services Offered
E2E Cloud offers scalable file system solutions using open-source technologies, including Database as a Service (DBaaS) with auto-scaling, Vector Database (VectorDB), compute and object storage, load balancers, containers, multi-region block storage, Virtual Private
Cloud (VPC), Simple Queue Service (SQS), AI platform (TIR), cloud GPUs, serverless Function as a Service (FaaS), and APIs.
Financial Performance
For the quarter ending September 2024, the company reported operational revenue of Rs.48 crore, reflecting a 118 percent increase from Rs.22 crore in Q1 FY24. Net profits grew to Rs.12 crore, representing a 100 percent rise from Rs.6 crore during the same period.
Shareholding Pattern
As of the September 2024 shareholding pattern, promoters hold a 51.56 percent stake in Genesys International, with Foreign Institutional Investors (FIIs) holding 3.39 percent, Domestic Institutional Investors (DIIs) at 4.11 percent, and retail investors owning 40.83 percent.
Ace investor Ashish Rameshchandra Kacholia holds 1,77,043 equity shares equivalent to 1.05 percent as of September 2024.
About the Company
E2E Networks specializes in offering CPU and GPU-based cloud computing platforms that enable customers to perform large-scale general and AI workloads, benefiting from its partnership with NVIDIA. The company has formed strategic alliances with leading OEMs such as NVIDIA, Intel, AMD, Microsoft, and Dell.
Written by – Siddesh S Raskar
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