ESDS Software Solution IPO fully subscribed on Day 1: Check business model and financials of this data centre service provider

Till 12.25 pm on Day 1, ESDS Software Solution IPO received an overall subscription of 1.01 times (101%), with retail investors' quota fully subscribed at 1.35 times. The non-institutional investors (NII) and Qualified Institutional Buyers (QIB) portion was booked at 1.45 times and 0.01 times.

ESDS Software Solution offers Infrastructure-as-a-Service (IaaS), managed services and Software-as-a-Service (SaaS) to enterprises, government organisations and BFSI customers. ESDS is one of the only two players in India providing the entire spectrum of GPU-as-a-Service (GPUaaS), cloud, managed services, data centre infrastructure and software solutions.

About the company

ESDS operates five Tier-3 data centres across India, with a combined area of more than 75,266 sq. ft., and served 2,501 customers in FY26. Its data centres are located in Nashik and Navi Mumbai in Maharashtra, Bengaluru, Mohali and Noida. The company caters to enterprises, government organisations and BFSI customers, and its services cover cloud infrastructure, cybersecurity, IT infrastructure and network management, backup and disaster recovery, database management and DevOps.

The company also has an international presence, with offshore data centre capacity across Australia and the Nordics. In Australia, ESDS is deploying a dedicated AI infrastructure cluster comprising approximately 8,208 NVIDIA B300 GPUs, with revenue from the associated agreement expected to begin in Q3FY27. The company has also entered into a five-year AI cloud infrastructure agreement, with an option for a further two years, having an aggregate potential contract value of $1.25 billion.

ESDS has developed proprietary technology platforms such as SWARAJ Cloud, earlier known as eNlight Cloud and rebranded in June 2026. The platform integrates more than 30 services and 80 capabilities across hybrid and multi-cloud environments. The company also offers SWARAJ AI for AI/ML, Generative AI and large language model workloads, along with GPUaaS through dedicated, multi-instance, time-sliced and bare-metal configurations.

Infrastructure-as-a-Service (IaaS) is the company's largest business, contributing ₹207.20 crore or 43.8% of revenue from operations in FY26. Within this, cloud services and cloud computing contributed ₹167.89 crore or 35.5%, while colocation and data centre services contributed ₹39.31 crore or 8.3%. Managed services contributed ₹194.59 crore or 41.2%, while SaaS accounted for ₹70.42 crore or 14.91%.

Going ahead, ESDS plans to expand its cloud computing and data centre infrastructure and increase its presence in AI infrastructure. The company is also looking to scale its GPU capacity to support its AI cloud business as demand for high-performance computing increases.

India's data centre market was valued at ₹114 billion in FY26 and is expected to reach ₹242 billion by FY30, growing at a 20.70% CAGR. Data centre capacity stood at 1,545 MW as of March 31, 2026, with enterprises and hyperscalers accounting for around 75% of demand. The market is being driven by rising data usage, wider cloud adoption, digitalisation and the growing use of AI.

ESDS has exposure to the growing demand for cloud computing through its GPUaaS, cloud and managed services businesses. As more companies move workloads to the cloud, demand for computing capacity should increase without customers having to make the same level of investment in their own infrastructure. Its presence among government and BFSI customers is also relevant, given the importance of data security, localisation and regulatory compliance in these sectors.

ESDS Software Solution Financials

ESDS Software Solution IPO objective

• Purchase and installation of cloud computing: The company will use ₹576 crore to purchase and install cloud computing and other equipment and infrastructure for its relevant data centres.
• General corporate purposes: Part of the IPO proceeds will be used for general corporate purposes and issue expenses.

ESDS Software Solution IPO details

ESDS Software Solution IPO aims to raise ₹720 crore through its public issue. This public issue is complete fresh issue of over 1.67 crore shares worth ₹720 crore.

The company has fixed the price band between ₹408 and ₹429 per share. The lot size, or the minimum bid quantity to apply for the issue is 34 shares. This equates to a minimum investment amount of ₹14,586 per lot at the upper end of the price band for retail investors.

ESDS Software Solution IPO: Important dates

ESDS Software Solution IPO will remain open for bidding from 28 August to 1 September 2026. After the bidding is closed, the allotment of shares is expected to be finalised on Wednesday, September 2.

Successful bidders can expect the shares to be credited to their demat accounts by September 3, with others receiving refunds on the same day. ESDS Software Solution shares are scheduled to list on the BSE and NSE on September 4 2026.

Strengths and opportunities

• Full-stack, technology-led service portfolio: The company runs infrastructure as a service (IaaS), managed services and software as a service (SaaS) on one platform, backed by its patented SWARAJ Cloud auto-scaling technology and a fully managed GPUaaS offering it launched in November 2025.
• Integrated, technology-driven data centre network: Five Tier 3 Data Centres in Nashik, Navi Mumbai, Bengaluru, Mohali and Noida cover more than 75,266 sq. ft. and are linked by multi-Gbps fibre-optic backbones, with guaranteed uptime of at least 99.95%. This supports reliable services and efficient operations.
• Strong relationships across different companies: Revenue retention stood at 94.9% in FY26, showing that the company is able to retain most of its existing customers. The customer base itself grew from 1,465 to 2,501 between FY24 and FY26, a CAGR of 30.66%.

Risks and threats

• Customer concentration: The largest customer contributed 15.9% of FY26 revenue, while the top 10 customers contributed 45.3%. Loss or reduction of business from key customers could therefore have a material impact on revenue and cash flows.
• Technology obsolescence: Technology is changing quickly, which could make the company’s existing cloud, power and cooling systems outdated. At the same time, R&D spending fell from 4.42% of revenue in FY24 to 1.32% in FY26, raising concerns about its ability to keep up with new technology.
• Dependence on government revenue: Government entities and projects contributed 27.37% of FY26 revenue from operations, down from 34.04% in FY24. A change in government policy, budgets or contracts could still hit this revenue.
• Receivables and working capital pressure: Customers get credit terms of 30 to 140 days, and DSO was 79 days in FY26. The loss allowance on trade receivables went up from ₹23.21 crore in March 2024 to ₹34.59 crore in March 2026.