Stocks Sink In Friday Trade On News Of L&T Technology Services-SWC Acquisition; More Than 13 Lakh Shares Were Traded
New Delhi: News of L&T Technology Services’ (LTTS) acquisition of Smart World & Communication may not have gone down well with shareholders as the stock fell over 6 percent in intraday trade on Friday. However, the stock on the NSE lost 5.46 percent to Rs. rose slightly to close at 3,448.40.
According to NSE data, as many as 13,02,790 shares of the company were traded in Friday’s trade with a total traded value of Rs. 44,883.85 lakhs.
In LTTS stock, which has returned more than 13 percent in the last six months, the company has sold its Smart World and Communication business at Rs. 800 crore after it entered into an agreement with parent Larsen & Toubro for acquisition.
The announcement was made on Thursday when LTTS said it would acquire the SWC business to expand its global reach in next-generation communications, sustainable spaces and cyber security.
The acquisition is expected to be completed on or before March 31, 2023, subject to the satisfaction of conditions identified under the Business Transfer Agreement.
Established 6 years ago in 2016, SWC fulfills the demands, addresses the opportunities in smart cities and provides smart solutions in the areas of end-to-end communications, city surveillance and intelligent traffic management systems for government as well as enterprises.
It has an employee base of over 700 engineers from diverse technology domains and has invested Rs. 1,000 crores in annual revenue.
LTTS believes that this proposed takeover is a development of the company’s 6 Big Bets strategy that will open new avenues of growth in 5G, digital products and AI and sustainability.
L&T Technology Services Shares: Buy or Sell?
Although the company is confident of the acquisition, domestic brokerage firm Kotak Institutional Equities has maintained its sell rating on L&T Technology Services citing expensive valuation. Brokerage on stock Rs. 3,200 is the target price.
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