ESDS Shares More Than Triple From IPO Price, Hit 5% Lower Circuit After Sharp Post-Listing Rally

ESDS Software Solution has delivered a striking run since its stock market debut in September, with the shares now trading more than three times above their IPO price. The rally, however, has been accompanied by sharp swings, with the stock hitting its 5% lower circuit on Thursday. 

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ESDS shares were locked at Rs 1,434.10 on the NSE on October 1. Even after the latest decline, the stock remains around 234% above its IPO price of Rs 429. 

That translates into a gain of Rs 1,005.10 per share for investors who received shares in the public offering and continued to hold them. 

ESDS Shares Up 89% From Listing Price 

ESDS made its stock market debut on September 4 at Rs 757 on the NSE, a premium of 76.46% to its issue price. 

The stock was listed at Rs 746.30 on the BSE, representing a premium of around 74%. 

From its NSE listing price, ESDS has gained more than 89% to reach Rs 1,434.10. 

The rally had been considerably stronger at its peak. According to Gaurav Garg, Head of Research at Lemonn, the stock had climbed as high as Rs 1,859 within three weeks of its IPO. 

The direction has changed in recent sessions, with ESDS hitting the 5% lower circuit at Rs 1,434.10 on Thursday. 

Analysts Turn Attention to Valuation and Earnings 

The sharp rise since listing has brought the company’s valuation and earnings performance into focus. 

Garg noted that while the data-centre and cloud opportunity remains part of the company’s business story, the share price has risen much faster than its earnings. 

He pointed out that ESDS was trading at around 140 times trailing earnings even at approximately Rs 1,434. The company’s profit had also declined 57% sequentially in the latest quarter. 

Nitant Darekar, Research Analyst at Bonanza, said investors should watch how ESDS executes its planned expansion in data-centre capacity as well as opportunities in AI infrastructure. 

He also highlighted planned capital expenditure, the ramp-up of new capacity, client concentration and valuation as areas to monitor following the steep post-listing rise. 

According to Darekar, the sustainability of earnings growth will play an important role in determining whether the current valuation can be supported. 

ESDS Raised Rs 720 Crore Through IPO 

ESDS Software Solution’s public offering consisted entirely of a fresh issue of equity shares worth up to Rs 720 crore. 

The IPO was offered in a price band of Rs 408 to Rs 429 per share. 

The company plans to use approximately Rs 576 crore from the proceeds to purchase and install cloud-computing equipment and other infrastructure for its data centres. The remaining amount is intended for general corporate purposes. 

DAM Capital Advisors and Systematix Corporate Services were appointed as the book-running lead managers, while MUFG Intime India is the registrar to the issue. 

Founded in 2005, ESDS operates across cloud services, managed services, data-centre infrastructure and software solutions. 

Less than a month after its market debut, the stock remains substantially above both its IPO and listing prices. The recent lower circuits, however, have brought the pace of that post-listing rally and the company’s earnings performance back into focus.