ESDS shares hit the 20% upper circuit for the third consecutive session today, more than tripling from their ₹429 IPO issue price
The surge has made ESDS one of the strongest-performing recent listings, although the stock’s sharp rise has substantially narrowed the upside projected by Choice Institutional Equities
The brokerage initiated coverage on ESDS with a ‘buy’ rating and a target price of ₹1,550, citing the company’s AI infrastructure contract with Australia-based Sharon AI as a key growth driver
Shares of enterprise cloud and AI company ESDS Software Solution hit the 20% upper circuit for the third consecutive session today, taking the stock to more than three times its IPO issue price.
The stock was locked at ₹1,289.55 apiece on the BSE, taking ESDS’ market capitalisation to ₹15,114.9 Cr ($1.6 Bn). On the NSE, the stock was locked at ₹1,308.05 as of 12:36 PM IST.
At these levels, ESDS shares were trading 200.6% above their IPO issue price of ₹429 apiece on the BSE. On the NSE, the stock was up 204.9% from the issue price.
ESDS made its stock market debut on Friday (September 4), listing at ₹757 on the NSE, a premium of 76.5% over its issue price. On the BSE, the stock debuted at ₹746.30, a premium of nearly 74%.
The shares subsequently hit their 20% upper circuits at ₹908.40 on the NSE and ₹895.55 on the BSE on the listing day and remained locked at their respective upper limits during the following session.
Meanwhile, Choice Institutional Equities has initiated coverage on ESDS with a ‘buy’ rating and a target price of ₹1,550. While the brokerage’s target represented an upside of about 71% from its reference price of ₹908, the stock’s subsequent rally has narrowed the potential upside to 18.5% from its NSE price of ₹1,308.05.
The brokerage expects ESDS’ $1.25 Bn AI infrastructure contract with Australia-based Sharon AI to be a key growth catalyst. It has projected the company’s operating revenue to increase nearly 9.7X from ₹472 Cr in FY26 to ₹4,581 Cr by FY28, driven primarily by the ramp-up of its AI infrastructure business.
However, Choice flagged the execution of the Sharon AI contract as a key risk, along with customer concentration, the capital-intensive nature of ESDS’ expansion plans, and growing competition in the cloud and AI infrastructure market.
The company’s ₹720 Cr IPO, comprising entirely a fresh issue of shares, was subscribed 135.88X during its three-day bidding period. The QIB portion was subscribed 261.51X.
Before the IPO, ESDS raised ₹216 Cr from anchor investors by allotting 50.34 Lakh shares at ₹429 apiece. Its anchor book included Motilal Oswal Mutual Fund, Bandhan Mutual Fund, Quant Mutual Fund, ITI Mutual Fund, and JM Flexicap Fund, among others.
Founded in 2005, Nashik-based ESDS provides cloud computing, data centre, managed services and AI-led digital infrastructure solutions to government and enterprise customers in India and overseas.
ESDS operates across infrastructure-as-a-service (IaaS), managed services and software-as-a-service (SaaS), serving customers across banking and financial services, government and enterprise segments.
ESDS plans to use ₹576 Cr, or 80% of the IPO proceeds, to purchase and install cloud-computing equipment and other data-centre infrastructure. The remaining proceeds have been earmarked for general corporate purposes.
Its operating revenue increased 30.7% YoY to ₹472.2 Cr in FY26 from ₹361.3 Cr in the previous fiscal. Consolidated net profit more than doubled to ₹120.8 Cr from ₹55.6 Cr during the period.
Source: Inc42
