A Nashik-based, 20-year-old AI-enabled cloud and data-centre company opens its Rs 720 crore mainboard issue on August 28 — five Tier-3 data centres, a proprietary SWARAJ cloud platform, near-9x PAT growth in two years, 94.92% revenue retention
An AI-enabled provider of cloud, managed services, data-centre infrastructure and software solutions plans to raise Rs 720 crore via a mainboard listing on BSE and NSE.
ESDS Software Solution Ltd, incorporated in August 2005 and headquartered in Nashik, Maharashtra, opens for subscription on August 28 with the issue closing on September 1.
The company is a full-stack technology company spanning cloud infrastructure, data centres and software — an integrated play on India’s digitalisation. Its primary business is Infrastructure-as-a-Service (IaaS), covering cloud computing, colocation and data-centre services across public, private, virtual private, hybrid and community cloud models.
On top of that core, it layers managed services and a suite of Software-as-a-Service (SaaS) products including data-centre management, vulnerability scanners, web access firewalls and VPNs, aiming to serve the complete cloud-data requirements of its clients from one platform.
The revenue is diversified across four service lines. In FY26, Managed Services contributed Rs 1,945.91 million, Cloud Services and Cloud Computing (IaaS) Rs 1,678.90 million, Software-as-a-Service Rs 704.22 million, and Colocation and Data Centre Services Rs 393.07 million, for total revenue of Rs 4,722.10 million.
The standout was Managed Services, which surged 157.22% in FY26, driven by strong growth from existing customers and new enterprise clients — the single biggest engine of the year’s growth.
The physical and technological moat is meaningful. ESDS operates five Tier-3 data centres across India spanning more than 75,266 square feet, and differentiates through its proprietary SWARAJ Cloud platform and AI-enabled solutions.
Its diversified presence across BFSI, government and enterprise segments supports customer diversification, and the customer base is exceptionally sticky — the company reports a 94.92% revenue retention rate with deepening account tenure, a hallmark of a recurring, contract-anchored revenue model.
The forward strategy leans into the AI and GPU wave. A headline $1.25 billion, five-year agreement with Sharon AI for deployment of around 8,000 Nvidia B300 GPUs in Australia provides strong revenue visibility and strengthens ESDS’s international presence in AI cloud and high-performance computing.
Domestically, the company is investing aggressively in capacity — expanding its data-centre footprint with new facilities in Kolkata and Sahibabad and upgrading existing infrastructure.
It is led by Founder, Promoter, Managing Director and Chairman Piyush Prakashchandra Somani, who holds a bachelor’s in Electronics Engineering from the University of Pune and brings over 20 years of IT-sector experience. The promoters are Piyush Prakashchandra Somani, Komal Piyush Somani and the P.O. Somani Family Trust.
Issue Details
| Particulars | Details |
|---|---|
| Issue Opens | August 28, 2026 |
| Issue Closes | September 1, 2026 |
| Listing | BSE, NSE (Mainboard) |
| Listing Date | September 4, 2026 |
| Price Band | Rs 408 – Rs 429 per share |
| Face Value | Rs 1 |
| Issue Size | Rs 720 crore (entirely fresh) |
| Offer for Sale | Nil |
| Lot Size | 34 shares |
| Min. Retail Investment | Rs 14,586 |
| Market Cap (Pre-IPO) | Rs 5,028.35 crore |
| QIB / NII / Retail | 50% / 15% / 35% |
| Lead Managers | DAM Capital Advisors, Systematix Corporate Services |
| Registrar | MUFG Intime India Pvt. Ltd. |
The issue is entirely a fresh issue with no offer-for-sale component. Proceeds are earmarked for the purchase and installation of cloud computing and other equipment and infrastructure for data centres (around Rs 576 crore) and general corporate purposes. The fully-fresh structure is a positive — the entire capital flows into the business to fund expansion rather than to selling shareholders.
Price Band Analysis
At the upper price band of Rs 429, ESDS is valued at a post-issue P/E of about 41.62x and a P/B of 8.15x based on FY26 financials. While the valuation appears premium, the company is performing well relative to comparable peers, supported by strong profitability, growth prospects and a technology-driven business model — leaving the issue fairly valued relative to peers in the lead manager’s framing. On pre-issue earnings, the P/E works out to about 35.66x–36.33x, with a NAV of Rs 52.66 and EPS of Rs 11.81.
The important caveat: there is no clean listed valuation anchor. The only quoted peer, E2E Networks, is loss-making (negative EPS and P/E), so the comparison offers little genuine benchmark — a richly-valued, high-growth niche tech play priced largely on its own merits.
GMP Watch
Grey-market interest has been strong — among the season’s best. In tracked data, the GMP made a high of ₹365 on August 27 and a low of ₹245 on August 25. A separate tracker pegged the premium at around ₹250 as of August 25, implying an expected listing price near ₹679 and a listing gain of roughly 58% over the issue price.
That is a robustly bullish signal for a mainboard issue, at a 55–85% implied premium over the Rs 429 upper band across trackers. Brokerages have leaned positive but selective, with reviewers noting the strong growth, margin expansion and declining leverage while flagging that the premium valuation leaves limited room for execution slips — and that listing-gain applicants should watch GMP and, crucially, QIB subscription demand near the close. As always, GMP is unofficial, unregulated and can swing sharply before listing.
Financial Performance
| Particulars (Rs million) | FY24 | FY25 | FY26 |
|---|---|---|---|
| Revenue from Operations | 2,865.18 | 3,613.35 | 4,722.10 |
| EBITDA | 1,018.81 | 1,548.85 | 2,342.34 |
| EBITDA Margin (%) | 35.56 | 42.86 | 49.60 |
| PAT | 136.09 | 556.12 | 1,208.23 |
| PAT Margin (%) | 4.75 | 15.39 | 25.59 |
| RoE (%) | 6.23 | 17.27 | 25.12 |
| RoCE (%) | 14.53 | 24.73 | 32.78 |
| EPS (Rs) | 1.35 | 5.71 | 11.81 |
| Debt to Equity | 0.66 | 0.15 | 0.08 |
Revenue from operations grew from Rs 2,865.18 million in FY24 to Rs 4,722.10 million in FY26 (up 30.68% year-on-year in FY26), but the profit story is the eye-catcher: PAT rose nearly 9x, from Rs 136.09 million to Rs 1,208.23 million, over two years.
That was driven by sharp margin expansion — EBITDA margin climbed from 35.56% to 49.60%, and PAT margin from 4.75% to 25.59% — reflecting a favourable revenue mix and strong operating leverage as high-value managed services scaled.
The return ratios have transformed alongside, with RoE rising from 6.23% to 25.12% and RoCE from 14.53% to 32.78%. The balance sheet has deleveraged dramatically — debt-to-equity has fallen from 0.66x in FY24 to just 0.08x in FY26, resulting in lower finance costs and greater flexibility for the planned expansion.
Peer Comparison (as of FY26)
| Company | EPS (Rs) | P/E | RoNW (%) | NAV (Rs) |
|---|---|---|---|---|
| ESDS Software Solution Ltd. | 11.81 | 36.33 | 22.85 | 52.66 |
| E2E Networks Ltd. | -0.76 | -819.78 | -0.92 | 81.97 |
The lone listed comparable, E2E Networks, is loss-making — so the peer table offers no meaningful valuation anchor, underscoring that ESDS is priced on its own growth merits rather than against a clear reference multiple.
Risks to Consider
Valuation is the headline risk. At a post-issue P/E of 41.62x and P/B of 8.15x, the pricing is premium and leaves limited room for execution disappointment; any delay in capacity utilisation or pressure on the recently-expanded margins could hit post-listing performance. The absence of a clean, profitable listed peer means there is no obvious anchor to check the valuation against.
Technology and innovation risk is structural. Failure to keep pace with rapid technological change, innovation and evolving industry standards could weaken the company’s competitiveness — and the industry is characterised by frequent new-service introductions and intense competition, including from far larger global cloud providers.
Subsidiary and losses history warrants attention. ESDS Cloud FZ-LLC incurred losses in FY24 and FY25 before turning profitable in FY26; a return to sustained losses could require additional funding and negatively affect consolidated financials and cash flows.
Security and asset-enforcement risk exists — unauthorised access to networks or data could cause reputational and financial damage, while significant assets are pledged to lenders, creating potential asset-enforcement risk if debt obligations are not serviced.