ESDS Software Solutions shares continued their spectacular post-listing performance on Tuesday, rising 16.21% to ₹1,266.70, extending their winning streak to the third consecutive session. The stock has now skyrocketed nearly 195% from its IPO price of ₹429, rewarding investors with exceptional gains in just three trading days. The latest surge follows the company's blockbuster debut on the exchanges, where ESDS Software listed at ₹757 on the NSE, commanding a premium of around 76.5% over its issue price. In just three sessions post-listing, ESDS Software shares have surged 195%, making it one of the most impressive IPO performances of the year and emerging as one of only two IPOs in 2026 to have more than doubled from its issue price on the day of listing.
The initial public offers received exceptional investor response, with ESDS Software Solutions IPO subscribed 136 times overall during the three-day bidding period from August 28 to September 1, 2026. As reported by The Economic Times, the QIB quota was subscribed more than 261 times, while the non-institutional and retail portions were booked around 193 times and 40 times, respectively. The ₹720-crore offer was entirely a fresh issue with a price band of ₹408-429 per share, with the funds raised proposed for purchase and installation of cloud computing and other equipment and infrastructure for data centres, along with general corporate purposes. An IPO investor has a notional gain of ₹661.05 per share at the current market price of ₹1,266.70. Prior to the IPO, the company had mobilised ₹216 crore from anchor investors, allotting 50.34 lakh shares at ₹429 apiece.
Choice Broking has initiated coverage on ESDS Software Solutions with a 'Buy' rating and a target price of ₹1,550, as reported by The Hindu BusinessLine. The brokerage values the company at 18 times FY28E EV/EBITDA, with DCF used as a sanity check for the valuation. Choice believes ESDS offers one of the most compelling listed opportunities to gain exposure to India's structural cloud, data-centre and AI infrastructure build-out, supported by its full-stack capabilities across cloud, managed infrastructure and datacentre services. The brokerage expects revenue/EBITDA/PAT to grow at 120.9%/72.6%/81.3% CAGR over FY26–29E, driven by core business momentum and the ramp-up of AI infrastructure revenues. Choice's target price of ₹1,550 signals nearly 71% upside from today's high, with the valuation implying ~31x FY28E forward P/E. Successful execution and faster ramp-up of the AI contract could provide further upside to earnings and valuation.
Choice Broking expects ESDS Software's revenue to scale up sharply over the next three years, with revenue estimates at ₹472 crore in FY26, ₹2,263 crore in FY27, ₹4,581 crore in FY28 and ₹5,092 crore in FY29. Profit after tax (PAT) is estimated at ₹120.8 crore in FY26, rising to ₹251.6 crore in FY27, ₹577 crore in FY28 and ₹719 crore in FY29. The brokerage highlighted the growth potential of India's cloud services and cloud GPU markets as key triggers for ESDS Software. India's cloud services market is expected to grow at a CAGR of 24.1% between FY26 and FY30, while the country's cloud GPU market is projected to expand at around 50% CAGR through FY30. Another key trigger is ESDS Software's $1.25 billion AI infrastructure contract with Sharon AI, which the brokerage sees as a potential inflection point for the company. Under the agreement, ESDS plans to lease around 8,208 NVIDIA B300 GPUs, which will be deployed for Sharon AI and used to provide services to its clients.
According to The Economic Times, ESDS Software operates in the digital infrastructure space, offering Infrastructure-as-a-Service (IaaS), Managed Services and Software-as-a-Service (SaaS) solutions. The company serves customers in India and overseas across key segments, including banking and financial services, government and enterprises. Its focus on cloud infrastructure and data-centre services positions it to benefit from the continued growth in digitalisation and cloud adoption. Infrastructure-as-a-Service (IaaS) contributed 44% of the company's overall revenue, while managed services accounted for 41%. Software-as-a-Service (SaaS) contributed the remaining 15%. The company is strategically shifting its focus toward international markets, with international revenue expected to overtake domestic revenue from FY27 onwards. Currently, international customers account for 25% of revenue while domestic customers contribute 75%, but the company aims to reverse this mix as it targets large customers across the US, Europe and APAC regions. The management expects this international focus to generate similar annual revenue to the ₹576 crore investment once fully deployed and operational.
The company has demonstrated exceptional financial performance with total income rising 28% year-on-year to ₹480.65 crore in FY26, compared with ₹376.64 crore in FY25, as reported by Business Standard. Profit after tax (PAT) more than doubled to ₹120.82 crore, up 117% from ₹55.61 crore a year earlier. The company's revenue grew at around 28% CAGR over FY24-FY26, while EBITDA margin expanded to 49.6%. At the upper price band, the company is valued at 41.6x FY26 P/E, implying a post-issue market capitalisation of ₹5,028 crore. The ₹576 crore investment in cloud computing equipment is expected to generate roughly ₹576 crore in additional annual revenue once fully deployed, following industry standards where large infrastructure investments typically generate similar revenue amounts. The India cloud business currently operates at around 50% EBITDA margin and 25-27% PAT margin. With a 76.5% listing premium followed by a near-195% surge from the IPO price in just three sessions, ESDS Software Solution has emerged as one of the most closely watched newly listed stocks, highlighting the intense investor interest surrounding the company's growth prospects, cloud infrastructure business and improving profitability.
