Highlights
| Issue Size – 1,67,83,216 shares | Issue Open/Close – 28 Aug / 1 Sep, 2026 |
| Price Band (Rs.) 408 – 429 | Issue Size (Rs.) – 7,200 mn |
| Face Value (Rs) 1 | Lot Size (shares) – 34 |
ESDS Software Solutions Limited (ESSL) incorporated in 2005, is an AI-enabled provider of cloud, managed services, Data Centre infrastructure and software solutions in India. They offers an end-to-end portfolio comprising Infrastructure-as-a-Service (IaaS), managed services and Software-as-a-Service (SaaS), serving customers across BFSI, Government and enterprise segments.
ESSL is among the first cloud providers in India to offer community cloud services, delivered on a multi-tenant model to organizations sharing similar business needs. It also follows a go-to-market strategy, partnering with third-party IT companies to deliver bundled solutions, letting both parties leverage each other’s technologies, align synergies, cut time-to-market and compete better on pricing and innovation.
ESSL operates five Tier 3 Data Centres across India, complied with international standards and industry best practices, including guaranteed uptime, supported by power redundancy services, disaster recovery services and 24/7 services team. Alongside, they served 2,501 customers across diverse range of end-user industries and customers.
Out of the total proceeds of Rs. 7,200 mn, Rs. 5,760 mn would go towards purchase and installation of cloud computing and other equipment and infrastructure for data centres, and remaining Rs. 1,440 mn go towards funding company’s general corporate purposes.
Key Highlights
- India’s Data Centre market is valued at Rs. 114 bn in FY26, is expected to reach Rs. 242 bn by FY30 at CAGR of 20.70 pct. Global cloud services market reached at Rs. 96 trillion in FY26, while Indian market of Rs. 651 bn in FY25 is projected to reach Rs. 1,876 bn by FY30 at CAGR of 23.56 pct. India’s managed services market valued at Rs. 176 bn in FY26 is projected to grow at CAGR 23.15 pct reaching Rs. 403 bn by FY30. India’s Cloud GPU market valued at USD 67 mn in FY25 is expected to reach USD 514 mn by FY30 at CAGR of 50.15 pct.
- ESSL’s IaaS portfolio covers colocation and Data Centre services, public, private, virtual private, hybrid, and community cloud solutions, plus GPUaaS. Its managed services include cloud & Data Centre management, cybersecurity, IT infrastructure & network management, backup and disaster recovery, database management, and DevOps.
- ESSL also develops proprietary technology, including SWARAJ Cloud, its patented cloud autoscaling technology, which has evolved into an AI-enabled cloud platform focused on data sovereignty, scalability, security, compliance and AI capabilities. Its SaaS portfolio includes Data Centre management tools, vulnerability scanners, web application firewalls, VPN solutions and AI-powered GPU monitoring.
- ESSL’s integrated IaaS, managed services, and SaaS offering has significantly deepened customer engagement, with the share of customers availing all three service lines rising sharply from 62.32 pct to 89.04 pct between FY24-26, while single-service customers declined. Despite this mix shift, Revenue Retention Rate remained strong at 94.92 pct in FY26, reflecting sticky, expanding customer relationships as clients increasingly consolidate their cloud transformation journey with the company.
- STPI operates 6 Tier-3 compliant Data Centres, of which ESSL runs 3 facilities. Together, they implement an asset-light Data Centre model enabling rapid scalability with minimal capital investment, meeting growing demand. The association adds ESSL’s credibility, also supports public sector entities and enterprises with localised, low-latency cloud and Data Centre solutions compliant with Indian regulatory norms.
- ESSL entered a 5-year AI cloud infrastructure agreement (2-year extension option) with an Australia-based neocloud AI compute provider, valued at USD 1.25 bn. The partner will deploy an 8,208 NVIDIA B300 GPU cluster with associated storage at an existing Australian data centre by September 2026, with revenue starting Q3 FY27 and fees payable monthly. This partnership will strengthen ESSL’s access to dedicated, high-performance AI compute for its cloud and managed services offerings.
- ESSL has entered an agreement with CEL for a proposed Tier III data centre at Sahibabad, expected operational by Q1 FY28. Additionally, ESSL proposes a Kolkata Data Centre on STPI premises under their master-service agreement, expected operational by Q3FY27.
- ESSL’s key growth strategies include (i) To expand through enhancing infrastructure, driving AI/ML innovation, and sustainability for efficient scaling and customer value, (ii) continue to scale on its AI-driven solutions, (iii) enhance collaboration with government & business partners, (iv) strengthen brand leadership, and (v) transition towards 100 pct renewable energy for sustainable and efficient operations
- The sales of the company have grown by 28.38 pct CAGR over FY24-26 and EBITDA/profit has grown 51.60 pct CAGR/198.03 pct CAGR over same year. In FY26 the company reported sales of Rs. 4,722 rose 30.70 pct YoY. EBITDA of the company increased 51.19 pct YoY to Rs. 2,342 mn. In FY26 the company posted profit of Rs. 1,208 mn, up 117.27 pct.
Key Risk
- ESSL’s customers migrate their businesses to a cloud for cyber security, any security breach or unauthorised access to platform or their data could harm reputation, create additional liability and adversely affect the business operations and results.
- Being engaged in an industry characterized by rapid technological innovation, evolving industry standards, frequent new service introductions, and changing customer demands. Any failure to innovate and respond to these changes would adversely affect its business.
Financial Performance
| Particulars (Rs. mn) | FY24 | FY25 | FY26 | CAGR | YoY |
| Sales | 2,865 | 3,613 | 4,722 | 28.38% | 30.70% |
| EBITDA | 1,019 | 1,549 | 2,342 | 51.60% | 51.19% |
| EBITDA Margin % | 35.57% | 42.87% | 49.60% | ||
| Profit | 136 | 556 | 1,208 | 198.03% | 117.27% |
| Profit Margin % | 4.75% | 15.39% | 25.58% | ||
| ROE % | 6.23% | 17.27% | 25.12% | ||
| ROCE % | 14.53% | 24.73% | 32.78% | ||
| Debt to Equity (X) | 0.66 | 0.15 | 0.08 | ||
| Debt Service Coverage (X) | 1.59 | 7.00 | 16.15 |
Source: – RHP.
Peer Comparison based on FY26 Financials.
| Particulars (Rs. mn) | ESDS Software Solutions | E2E Networks |
| Sales | 4,722 | 2,456 |
| EBITDA | 2,342 | 1,263 |
| EBITDA Margin % | 49.60% | 51.43% |
| Profit/Loss | 1,208 | (156) |
| Profit/Loss Margin % | 25.58% | (6.35)% |
| ROE % | 25.12% | (0.95)% |
| ROCE % | 32.78% | (0.52)% |
| Debt to Equity (X) | 0.08 | 0.06 |
| Debt Service Coverage (X) | 16.15 | 5.45 |
Source: – RHP.
Valuation
ESDS Software Solution Limited, incorporated in 2005, is an AI-enabled end-to-end IT service provider with over two decades of experience in building and managing IT infrastructure. The company is also expanding its footprint with two upcoming data centers in Kolkata (West Bengal) and Sahibabad (Uttar Pradesh) as part of its continued infrastructure growth. Its portfolio brings together compute, storage, networking, cloud and managed IT services across the infrastructure lifecycle. At the upper end of the price band of Rs. 429, the issue is priced at an PE of 41.6x its FY26 post issue capital. The issue appears to be fully priced. However, only high-risk investors may subscribe this IPO from a longer-term perspective.
Disclaimer: The views shared in blogs are based on personal opinions and do not reflect the company’s views. Investment involves risk, and it is advisable to consult a financial advisor before making any investment through the app. The decision to invest is solely that of the investor, and the company or its communication cannot be held responsible for it.
