ESDS Software Solution Sets ₹720-Crore IPO Price Band at ₹408–₹429

IT infrastructure services provider ESDS Software Solution is returning to the public market with a ₹720-crore initial public offering (IPO), scheduled to open on August 28 and close on September 1. The price band has been fixed at ₹408 to ₹429 per share. The offering is entirely a fresh issue of approximately 1.68 crore new shares at the upper end of the price band, implying a post-issue dilution of about 14.3 per cent and a market capitalization of roughly ₹5,000 crore.

Following the issue, the promoter group, led by the Somani family, will see their stake decline from approximately 46 per cent to 39 per cent. External investors in the company include Mukul Agrawal, Ashish Kacholia, Anchorage Capital Fund, and Capri Global Ventures. None of these existing external investors are offloading their shares through the IPO.

Out of the total proceeds, ₹576 crore has been earmarked for investment in cloud-computing equipment, infrastructure, and hardware at ESDS data centres located in Airoli, Bengaluru, Mohali, and Nashik. The remaining funds will be allocated toward general corporate purposes.

The IPO values ESDS at approximately 41.6 times its projected FY26 post-issue earnings. For comparison, listed peer E2E Networks commands a significantly higher valuation relative to its revenue and earnings, reflecting market demand for cloud and AI infrastructure businesses in India. ESDS reported a 28 per cent revenue compound annual growth rate and a 52 per cent EBITDA CAGR over the FY24–FY26 period, alongside low leverage and improved return ratios.

Operating for 21 years, ESDS provides computing infrastructure, managed IT services, and proprietary software solutions to enterprises, banks, and government bodies. The company operates five data centres across Nashik, Navi Mumbai, Bengaluru, Mohali, and Noida, spanning over 75,000 square feet. In FY26, the company served 2,501 customers, deriving roughly 44 per cent of its revenue from infrastructure and cloud services, 41 per cent from managed IT services, and 15 per cent from software.

The company's financial trail shows a steady recovery in profitability following its earlier 2021 draft filings. After slipping into losses in FY22 and FY23, ESDS experienced revenue growth of 26 per cent in FY25 and 31 per cent in FY26, with profit after tax reaching ₹120.8 crore in FY26. Operating profitability also strengthened, with EBITDA margins recovering from roughly 23 per cent in FY23 to nearly 50 per cent in FY26.

Looking ahead, ESDS plans to expand its physical footprint by opening new data centres in Kolkata by the third quarter of FY27 and Sahibabad by the first quarter of FY28. The company is also entering the managed AI-computing space, supported by recent agreements such as a five-year pact with Sharon AI for Nvidia B300 processors and an overseas GPU-as-a-service project secured via its subsidiary SPOCHUB.

"The public listing of ESDS Software Solution highlights the growing maturity of India's enterprise IT and data centre landscape. With significant capital allocation directed toward infrastructure expansion and cloud capabilities, the company's ability to maintain healthy capacity utilization alongside stringent cost management will be critical. Investors must evaluate the offering based on sustainable operational efficiency and the execution of its long-term growth roadmap." — Dr. Shishir Gupta, Founder & CEO, StartupLanes