ESDS Software Solution IPO Day 3: Last day to buy; check GMP, subscription status, and other details - Apply or not?

ESDS Software Solution IPO Day 3: The initial public offering (IPO) of ESDS Software Solution opened for subscription on Friday, August 28, and is set to close today, Tuesday, September 1. The company has fixed the price band for the issue at ₹408–429 per share.

ESDS Software Solution is looking to raise ₹720 crore through the public issue, which consists entirely of a fresh issue of 1.68 crore equity shares. The IPO does not include an offer-for-sale (OFS) component. The lot size for an application is 34 shares. The minimum amount of investment required by an individual investor is ₹14,586 (1 lot).

The basis of allotment is expected to be finalised on Tuesday, September 2. Shares are likely to be credited to the demat accounts of successful applicants on Wednesday, September 3, while refunds for unsuccessful bidders are also expected to be initiated on the same day. The company's shares are tentatively scheduled to make their debut on the BSE and NSE on September 4.

Of the total proceeds, ESDS Software Solution plans to utilise ₹576 crore for the procurement and deployment of cloud computing equipment and other infrastructure required for its data centre operations. The remaining amount will be allocated towards general corporate purposes.

DAM Capital Advisors and Systematix Corporate Services are the book-running lead managers for the issue, while MUFG Intime India has been appointed as the registrar.

ESDS Software Solution IPO GMP Today

Investor sentiment toward the IPO is extremely robust, as its grey market premium (GMP) is ₹316 on September 1. This suggested that the stock was likely to debut at ₹745, at a massive 73.66% premium to IPO price.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

ESDS Software Solution IPO subscription status

ESDS Software Solution Day 3 subscription remained strong, with the issue subscribed 33.76 times as of 11:05 am on September 1.

The public issue received bids for 39.66 crore shares against 1.17 crore shares on offer. Non-institutional investors (NIIs) led the subscription, with their portion booked 98.15 times, while the retail investor category was subscribed 24.94 times. Moreover, the Qualified Institutional Buyers (QIB) quota was bid 0.89 times till now.

Should you subscribe?

Brokerages have turned constructive on ESDS Software Solutions Ltd.'s initial public offering, citing the company's improving financial performance, expanding presence in cloud and AI infrastructure, and long-term growth opportunities.

According to Anand Rathi, the company's valuation at the upper end of the price band stands at 41.6x FY26 P/E, implying a post-issue market capitalisation of ₹50,284 million. The brokerage believes the company's premium valuation is justified to an extent, given the growth potential of India's cloud and AI infrastructure market, its integrated offerings and improving profitability. It has recommended a “Subscribe – Long Term” rating for the issue.

"The company is well positioned to benefit from the increasing adoption of cloud infrastructure, managed services and AI-led workloads in India, supported by its integrated service offerings, expanding Data Centre infrastructure and focus on GPUaaS and AI-driven solutions," it said.

Meanwhile, Choice has also assigned a Subscribe for Long-Term rating to the issue. The brokerage said ESDS Software Solutions Ltd. has spent the past three years strengthening and restructuring its business rather than focusing solely on growth.

Choice noted that the company was a loss-making and heavily borrowed cloud operator in FY23, with an EBITDA margin of 22.9%. By FY26, however, it reported a profit of ₹121 crore on revenue of ₹472 crore, while its EBITDA margin improved to 49.6% and return on capital employed (RoCE) reached 25.2%. Debt declined to ₹109 crore, compared with cash of ₹720 crore.

The brokerage said the company's profitability has been built over the past three years. At the upper price band of ₹429, based on FY26 post-issue earnings per share (EPS) of ₹10.3, the IPO is valued at 41.6x earnings, with the multiple based on the company's existing performance rather than its future expectations.

"This is not a story that resolves in a listing pop — the AI contract begins contributing only from Q3 FY27 and the new facilities later still — but for an investor willing to hold through that ramp, the price asks only for continuation of what is already working and pays nothing for what comes next. We recommend “SUBSCRIBE FOR LONG-TERM," it suggested.

About ESDS Software Solution

Incorporated in August 2005, ESDS Software Solution Limited is an AI-enabled company offering cloud, managed services, Data Centre infrastructure and software solutions across India. The company provides an end-to-end suite of services, including Infrastructure-as-a-Service (IaaS), managed services and Software-as-a-Service (SaaS), catering to customers across the BFSI, Government and enterprise sectors.

During Fiscal 2026, ESDS Software Solution served 2,501 customers and recorded revenue from operations of ₹4,722.10 million.

Its IaaS portfolio spans a range of offerings, including colocation and Data Centre services, as well as public, private, virtual private, hybrid and community cloud solutions. The company also offers GPU-as-a-Service (GPUaaS). ESDS operates five Tier 3 Data Centres across India, with a combined area of more than 75,266 sq. ft.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.