Larsen & Toubro is buying a 21% stake in E2E Networks, an artificial intelligence (AI) cloud provider, in a Rs 1,327-crore all-cash transaction.
In a two-part deal, L&T proposes to acquire a total of 4.17 million equity shares. It has also struck a strategic partnership with the AI company, under which it will integrate E2E’s cloud and AI cloud platforms with its existing data centre management and solutions.
Data centres & cloud services
This will enhance its offerings to startups and enterprises.
E2E was the first to introduce cloud-based graphics processing units (GPUs) in India back in 2018, through its relationship with AI juggernaut Nvidia. NSE-listed E2E claims a roster of blue-chip clients, including Zomato, CarDekho, 1mg, Junglee Games and Purplle.
In a disclosure to the BSE, L&T said it will have the right to nominate up to two directors on the board of E2E after the acquisition.
The bold move by the engineering major gives it a head start in the red-hot AI market. “Collaborating with E2E Networks allows us to offer our clients seamless, scalable and secure cloud experiences,” said Seema Ambastha, chief executive of L&T data centre and cloud business.
E2E’s advanced cloud computing solutions include the AI/ML platform TIR and cloud GPUs such as Nvidia A100, H100 and H200.
“The strategic collaboration between E2E and L&T marks a significant milestone for the future adoption of domestically built hyperscale cloud platforms in India,” said Tarun Dua, chairman and managing director of E2E.
Hasit Joshipura, adviser to chairman of L&T Group for data centre and cloud, told ET that with the emergence of a data-driven economy, the importance of data centres has increased. “L&T builds half the data centres in the country. (It) also operates data centres for some state governments and has two IT companies (LTIMindtree and L&T Technology Services) for managed services. The only space in which there was a gap was running its own data centres,” he said.
The engineering major had also identified semiconductors, marketplaces and data centres as future growth engines.
To start with, it set up a proof of concept, a 2 MW data centre, in Panvel. Now, it runs 30 MW, of which 12 MW is live in Sriperumbudur, near Chennai.
Noting that “this is the space we want to be in,” Joshipura pointed out that “when we started, the flavour of the month was co-location. From there, it moved to a vanilla cloud. And now, of course, it has entirely moved to the GPU cloud. The rationale is that there is a potential partnership here for us to offer additional capabilities to clients, who are going to reside in our data centres.”
L&T and E2E are both potential bidders in the government’s Rs. 10,000 crore IndiaAI Mission GPU tender through which the centre intends to procure 10,000 GPUs and make compute time available to startups and researchers.
L&T’s Ambastha told ET in September that the company meets all the pre-qualification and technical qualification criteria of the tender.
In the same month, E2E’s Dua said the relaxations on revenue qualifications in the tender have allowed the company to qualify directly.
Source: Economic Times