ESDS Software Solution IPO Day 3: GMP indicates 74% premium; issue subscribed 18.34x. Should you bid?

The ESDS Software Solution IPO entered its third and final day of bidding on Tuesday, September 1, continuing to attract strong interest from investors. The issue has also generated considerable buzz in the grey market, where its shares are commanding a premium of around 74%. The strong grey market premium (GMP) suggests that investors anticipate a potentially robust listing for the company’s shares.

On the second day of bidding, the IPO was subscribed 18.34 times overall, against the 1.23 crore shares on offer. Demand was particularly strong among retail investors, whose portion was subscribed 14.61 times, against the 61.76 lakh shares reserved for them.

The company has set a price band of Rs 408–429 per share for its Rs 720-crore public issue. The three-day bidding window will close on September 1, 2026. The IPO comprises entirely a fresh issue of 1.68 crore equity shares.


Investors can bid for a minimum of 34 shares and in multiples of 34 thereafter. At the upper end of the price band, a retail investor will need to invest Rs 14,586 for one lot of 34 shares.

The IPO allotment is expected to be finalised on September 2, 2026, while the shares are likely to be listed on the NSE and BSE on September 4, 2026, subject to the IPO schedule remaining unchanged.

ESDS Software Solution IPO Valuation

At the upper end of the price band, ESDS Software Solution’s FY2026 price-to-earnings (P/E) multiple stands at 36.33 times, while the multiple is 34.55 times at the lower end. By comparison, the average P/E ratio of the industry peer group is 819.78 times, while the Nifty 50’s P/E ratio stood at 20.48 times as of August 20, 2026.

On the EV/EBITDA metric, the company is valued at 16.30 times at the upper end of the price band and 15.40 times at the lower end for FY2026. This compares with an average EV/EBITDA multiple of 99.49 times for its industry peer group. ESDS Software Solution reported a weighted average return on net worth (RoNW) of 17.09% over the last three financial years.

DAM Capital Advisors Ltd. is the book-running lead manager for the issue, while MUFG Intime India Pvt. Ltd. is the registrar.

Ahead of the IPO, ESDS Software Solution raised Rs 216 crore from anchor investors. The company allotted 50.34 lakh shares to anchor investors at Rs 429 per share.

ESDS Software Solution IPO Subscription Status

The ESDS Software Solution IPO received a strong response from investors on Day 1, with the issue subscribed 18.34 times against the total offer size of 1.23 crore shares.

• Retail Individual Investors (RIIs): The retail portion was subscribed 14.61 times, with bids received for 61.76 lakh shares against the 26.47 lakh shares reserved for the category.
• Non-Institutional Investors (NIIs): The NII segment was subscribed 3.51 times, with investors placing bids for shares available under the quota.
• Qualified Institutional Buyers (QIBs): The QIB portion, comprising 35.29 lakh shares, received bids for 1% of the shares on offer so far.

ESDS Software Solution IPO GMP Today

The latest Grey Market Premium (GMP) for the ESDS Software Solution IPO stands at Rs 316, indicating a premium of around 74% over the upper price band of Rs 429 per share. Based on the current GMP, the IPO is estimated to list at approximately Rs 745 per share.

Disclaimer: GMP is an unofficial market indicator and can fluctuate before the stock's listing. The estimated listing price is indicative only and should not be considered a guarantee of the actual listing price.

ESDS Software Solution IPO Proceeds

The proceeds from the ESDS Software Solution IPO will primarily be utilised to expand and strengthen the company’s data centre infrastructure. Approximately Rs 576 crore is proposed to be allocated towards the purchase and installation of cloud computing equipment and other data centre infrastructure.

The balance of the IPO proceeds will be used for general corporate purposes, providing the company with flexibility to meet its broader business and operational requirements.

Financial Performance

ESDS Software Solution Ltd. reported a significant improvement in its financial performance in FY26. Total income increased 28% year-on-year to Rs 480.65 crore, compared with Rs 376.64 crore in FY25.

Profitability improved even more sharply, with profit after tax (PAT) more than doubling to Rs 120.82 crore, up 117% from Rs 55.61 crore in the previous year. The strong growth in both revenue and profitability reflects a notable improvement in the company’s financial performance during FY26.

About ESDS Software Solution

Incorporated in August 2005, ESDS Software Solution Limited is an AI-enabled provider of cloud, managed services, data centre infrastructure and software solutions in India. The company offers an end-to-end portfolio spanning Infrastructure-as-a-Service (IaaS), managed services and Software-as-a-Service (SaaS), catering to customers across the BFSI, government and enterprise segments. In FY26, the company served 2,501 customers and recorded revenue from operations of Rs 4,722.10 million.

Its IaaS portfolio covers colocation and data centre services, as well as public, private, virtual private, hybrid and community cloud solutions and GPU-as-a-Service (GPUaaS). ESDS operates five Tier 3 data centres across India, spanning more than 75,266 sq. ft. These facilities are supported by redundant power systems, disaster recovery infrastructure and round-the-clock services.

The company’s managed services portfolio includes cloud and data centre management, cybersecurity, IT infrastructure and network management, backup and disaster recovery, database management and DevOps services.

ESDS also develops proprietary technology solutions, including SWARAJ Cloud, its patented cloud autoscaling technology. The platform has evolved into an AI-enabled cloud solution focused on data sovereignty, scalability, security, compliance and AI capabilities. Its SaaS offerings include data centre management tools, vulnerability scanners, web access firewalls, VPN solutions and AI-powered GPU monitoring solutions.

As of June 30, 2026, the company had 993 employees supporting its data centre operations, cloud infrastructure, security management, research and development, sales, service delivery and other functions.

Should you subscribe?

According to a research report by Anand Rathi, ESDS Software Solution is well placed to benefit from the growing adoption of cloud infrastructure, managed services and AI-driven workloads in India. Its integrated service offerings, expanding data-centre infrastructure, and focus on GPU-as-a-Service (GPUaaS) and AI-led solutions could support future growth.

However, the company operates in a highly competitive and technology-intensive market, facing increasing competition from global cloud giants as well as domestic data-centre and cloud service providers. Customer concentration, reliance on government projects and the need for continued investments in infrastructure and technology also warrant a cautious approach to valuation in the near to medium term.

At the upper end of the price band, ESDS is valued at 41.6 times its FY26 earnings, translating into a post-issue market capitalisation of Rs 50,284 million. Anand Rathi believes the company’s strong growth prospects in India’s cloud and AI infrastructure market, integrated offerings and improving profitability provide some justification for the premium valuation.

Overall, Anand Rathi has assigned a “Subscribe – Long Term” rating to the IPO, citing the company’s long-term growth potential despite the associated risks.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)