2 days ago
ESDS Software Solution IPO Shows Strong Demand, Analysts Say Apply
ESDS Software Solution is asking investors to buy shares in its IPO.
The company is offering shares for between ₹408 and ₹429 each.
Investors showed strong interest, with the IPO subscribed 5.77 times by the end of its second day.
The grey market price suggested the shares might list much higher, but this is only an unofficial estimate.
Some brokerages recommended buying the shares for the long term.
They said ESDS could benefit from growing demand for cloud services, data centres and artificial intelligence.
However, the shares are expensive compared with the company’s earnings, and the business faces competition and technology risks.
The IPO closes on September 1, with listing expected on September 4.
The ₹720-crore ESDS Software Solution IPO closes on September 1, with shares priced at ₹408–₹429.
The issue was subscribed 2.10 times on Day 1 and 5.77 times by the end of Day 2.
The grey market premium was reported at ₹316, implying an estimated ₹745 listing price and a 73.66% premium.
Anand Rathi and Choice recommended subscribing for the long term, citing improving profitability and cloud and AI growth prospects.
ESDS plans to use ₹576 crore for cloud-computing equipment and data-centre infrastructure, while brokerages flagged premium valuation and execution risks.
- Who
- ESDS Software Solution and investors bidding in its IPO.
- What
- A ₹720-crore IPO comprising 1.68 crore freshly issued equity shares, with no offer-for-sale component.
- Where
- The shares are expected to list on the BSE and NSE; ESDS operates five Tier 3 data centres across India.
- When
- The IPO opened on August 28, closes on September 1, and is tentatively scheduled to list on September 4.
- Why
- ESDS is raising funds primarily to procure and deploy cloud-computing equipment and other infrastructure for its data-centre operations.
Reasons to Apply
Risks to Consider
Growth prospects
Reasons to Apply
Anand Rathi and Choice recommended subscribing for the long term, citing demand for cloud infrastructure, managed services and AI-led workloads, along with ESDS’s integrated offerings and GPU-as-a-Service focus.
Risks to Consider
The company faces intense competition, customer concentration and the possibility that its technology could become obsolete.
Financial performance
Reasons to Apply
Choice said ESDS improved from a loss-making, heavily borrowed position in FY23 to ₹121 crore profit on ₹472 crore revenue in FY26, while EBITDA margin reached 49.6% and debt declined to ₹109 crore.
Risks to Consider
The reported valuation remains high at about 41.6 times FY26 earnings, meaning continued financial performance is needed to support the price.
Listing expectations
Reasons to Apply
The ₹316 grey market premium suggested an estimated 73.66% listing gain and strong investor sentiment.
Risks to Consider
Grey market premiums are unofficial indicators and do not guarantee the actual listing price or investor returns; Choice said the investment case depends on holding through future business expansion rather than merely seeking a listing gain.
Key facts
- Price band
- ₹408–₹429 per share
- Issue size
- ₹720 crore
- Subscription
- 2.10 times on Day 1 and 5.77 times by the end of Day 2
- Grey market premium
- ₹316 on September 1, implying an estimated ₹745 listing price and a 73.66% premium over ₹429
- Use of proceeds
- ₹576 crore for cloud-computing equipment and data-centre infrastructure; the balance for general corporate purposes
- Application details
- Lot size of 34 shares; minimum investment of ₹14,586
- IPO reservation
- QIBs 50%, NIIs 15% and retail investors 35%
- Expected timeline
- Basis of allotment on September 2, share credit and refunds on September 3, and tentative listing on September 4
Quotes
Anand Rathi
Brokerage firm providing an investment recommendation on the ESDS Software Solution IPO
“The company is well positioned to benefit from the increasing adoption of cloud infrastructure, managed services and AI-led workloads in India, supported by its integrated service offerings, expanding Data Centre infrastructure and focus on GPUaaS and AI-driven solutions,”
livemint.com
Sources
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