ESDS Software Solution IPO - 7 thigs to know
ESDS Software Solution Ltd, had filed the Draft Red Herring Prospectus (DRHP) with SEBI for its proposed IPO in the second half of last year and the SEBI approval has been given in the first week of December 2021.
However, ESDS Software Solution Ltd is yet to finalize its IPO dates and may be waiting for a more conducive and stable market situation to come out with the IPO.
7 important things to know about ESDS Software Solution IPO
1) ESDS Software Solution Ltd had filed for its IPO with SEBI which comprises of a fresh issue of Rs.322 crore and an offer for sale (OFS) of 215.25 lakh shares. The eventual value of the IPO will depend on the price band that is set for the IPO.
The OFS portion of the IPO will be used to give exit to some of the early shareholders and the promoters of the company and also to enhance the free float stock post listing.
2) The ESDS Software Solution IPO consists of Rs.322 crore, will be predominantly used for purchasing cloud computing equipment for its various data centres. In addition, the funds will also be partially allocated for funding the long term working capital requirements of the company in an industry that is fairly working capital intensive.
A small portion of the fresh issue proceeds will also be used for repayment and prepayment of loans and other debt, so as to reduce the financial risk in the balance sheet.
3) ESDS Software Solution Ltd was incorporated in the year 2005 and is into managed cloud services. It is an end-to-end multi cloud requirements provider in India. It also provides one stop solutions to customers on cloud adoption, which is the trend in data management globally and perhaps the road ahead in India too.
Its service offerings are broadly flagged under two categories viz. IAAS (cloud computing infrastructure as a service) and SAAS (software as a service).
4) The customer base of ESDS Software Solution Ltd is spread across various industry specializations as well as government agencies. Apart from various government departments and agencies depending on their service, they also cater to the private sector in industries ranging across BFSI, manufacturing, IT, ITES, telecom, real estate, pharmaceuticals, retail and even in the area of education. Its customer base is spread across the APAC region, Europe, Middle East and the Americas.
5) The company, ESDS Software Solution Ltd, brings several key competitive strengths to the table. Apart from a one-stop solution, it also provides a scalable offering where the solution can be easily adapted to changing size.
The company was promoted by Piyush Prakashcahandra Somani, who brings extensive experience and exposure to this line of business. With its innovative billing solutions for customers, ESDS Software Solution Ltd has emerged as a pre-eminent cloud service provider in India.
6) ESDS Software Solution Ltd reported net revenues of Rs.174 crore for the financial year ended FY21. Its revenues have grown at a CAGR of 13% over the last 2 years. The profits have been quite erratic but that is more due to the nature of the business and the pressure created in the business model by the pandemic.
The promoters currently hold 90.76% in the company and that will come down post the issue. ESDS Software Solution Ltd has a par value of Rs.1 per share and there will be a 50% allocation to the QIB segment and 35% to the retail segment.
7) The IPO of ESDS Software Solution Ltd will be lead managed by Axis Capital and IIFL Securities. They will act as the book running lead managers or BRLMs to the issue. Link Intime India Private Ltd will be the designated registrars to the issue.
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