ESDS Software Solution Ltd. shares had gained more than 300% since their 4 September trading debut, putting the roughly $80 million IPO on course to rank among India’s best-performing new listings, Bloomberg reported on 23 September.
Key points
- Investors bid for 136 times the shares offered in ESDS’s roughly $80 million IPO.
- Analyst Kunal Bajaj projects revenue of nearly ₹2,300 crore for the fiscal year ending March 2027, up from ₹470 crore.
- A $1.25 billion agreement with SharonAI Holdings involves deploying 8,000 GPUs in Australia.
- The rally may improve the prospects for offerings from Sify Infinit Spaces, Yotta Data Services and STT Global Data Centres India.
ESDS drew bids for 136 times its IPO
Demand was substantial before ESDS began trading. Investors bid for 136 times the shares available in its roughly $80 million offering. Its rise since listing ranks among the top share-price gains over a month for Indian IPOs of $20 million or more, according to Bloomberg data.
The IPO offer price was ₹429 a share. At that price, ESDS had an enterprise value equal to 2.1 times estimated revenue for the fiscal year ending March 2028, according to Kunal Bajaj of Choice Institutional Equities. He put the comparable figure for E2E Networks Ltd. at 11 times.
Bajaj’s comparison used the IPO price rather than the price reached after ESDS began trading. Shares in E2E, the peer in his valuation comparison, had tripled during the year. Bajaj was the sole analyst following ESDS at the time of the report.
ESDS’s advance has come in a market with relatively few listed routes into cloud computing, data centres and AI infrastructure. India’s equity market is worth roughly $5 trillion, yet investors seeking those businesses have a limited selection of companies, according to Bloomberg.
SharonAI agreement underpins Bajaj’s revenue forecast
Bajaj estimated that ESDS revenue could more than quadruple in the fiscal year ending March 2027, reaching nearly ₹2,300 crore from ₹470 crore. A $1.25 billion cloud-capacity agreement with SharonAI Holdings Inc. is a key part of that projection.
The agreement involves deploying 8,000 graphics processing units at an existing data-centre provider used by Nasdaq-listed SharonAI in Australia. The deployment places an Australian facility at the centre of the revenue growth Bajaj expects from the Indian company.
The analyst’s forecast covers the year ending March 2027, while his IPO valuation comparison uses estimated revenue for the following fiscal year. Those are separate measures: one projects how much ESDS might sell, and the other compares its offer-price enterprise value with a revenue estimate for a later period.
On 23 September, Bajaj said he planned to revisit his ₹1,550 price target after ESDS’s quarterly earnings, then due on 24 September. The ₹1,550 target was in place before the scheduled earnings report.
ESDS rally draws attention to Indian data centres
ESDS is not the only listed company drawing interest from investors seeking exposure to data centres and AI infrastructure. Fibre-optic makers Sterlite Technologies Ltd. and HFCL Ltd. have also become proxies for that investment theme. Sterlite shares had risen more than 700% during the year, while HFCL shares had more than tripled.
Avinash Gorakshakar, founder of Avinash Mentor Research in Mumbai, said investors were pricing in at least two years of growth for data centres and related infrastructure. He said ESDS’s market performance strengthened the case for more companies in the sector to seek listings.
The ESDS rally may improve the offering prospects of Sify Infinit Spaces Ltd., Yotta Data Services Pvt. and STT Global Data Centres India Pvt., Bloomberg reported. Sify is a data-centre operator. Yotta runs India’s largest cluster of Nvidia AI chips, according to the same report.
