ESDS Software Services Shares Surge After Impressive Debut
On Friday, shares of ESDS Software Services made a remarkable entrance, debuting at a staggering premium of 76 percent, with the subsequent trading session catapulting them over 100 percent above the initial valuation.
During trading, ESDS shares reached the upper circuit limit, soaring to ₹908.40, marking an increase of 111.5 percent from the issue price.
On Monday, ESDS Software’s shares were firmly positioned at the 20 percent upper circuit limit, a mere day following an extraordinary market debut, as investors eagerly continued to invest in the recently launched stock.
Furthermore, Choice Broking has initiated coverage with a ‘Buy’ rating, citing the stock as a prime opportunity to capitalize on India’s burgeoning cloud-to-AI infrastructure sector.
The stock commenced trading at the upper threshold of ₹1,074.65 on the Bombay Stock Exchange (BSE) and has maintained this price point. By 10:05 AM, buy orders for 2.18 million shares were exclusively recorded on both the BSE and National Stock Exchange (NSE).
ESDS Software Services debuted at ₹757 per share on the NSE, significantly above the offer price of ₹429, equating to a premium of approximately 76.46 percent.
Meanwhile, on the BSE, it opened at ₹746.30, reflecting a 73.96 percent increase. Throughout the trading day, shares reached a peak at ₹908.40, reflecting an astonishing increase of 111.5 percent from the initial pricing.
Perspective from Analysts on ESDS Software Shares
Choice Broking observes that ESDS presents a uniquely compelling opportunity for investors looking to engage with India’s evolving cloud, data center, and AI infrastructure capabilities, bolstered by its comprehensive service offerings in cloud management and data centers.
“The growth potential is undergirded by capacity enhancements, improved customer monetization, and operational leverage, particularly with the $1.25 billion AI contract poised to significantly influence earnings trajectories,” the brokerage expressed.
Moreover, projections indicate that revenue, EBITDA, and PAT could witness compound annual growth rates (CAGR) of 120.9 percent, 72.6 percent, and 81.3 percent, respectively, between FY26 and FY29, fueled by the core business momentum and the ramp-up of AI infrastructural revenues.
The target price of ₹1,550 denotes an expected additional upside of approximately 44 percent from today’s zenith.
Conversely, Arun Kejriwal, the founder of Kejriwal Research & Investment Services, warns against rash speculation in stocks. He cautioned that even at current levels, the anticipated performance for FY27, FY28, and FY29 has likely already been factored into the stock’s price.
Adding to the discussion, Kejriwal highlighted potential concerns regarding a partnership agreement the company has formed with an Australian entity, indicating that further clarification during the upcoming conference call following the June results could provide essential insights regarding the stock’s viability at these prices.
Details of ESDS Software’s IPO
The company’s initial public offering (IPO) was open for bidding from August 28 through September 1, witnessing an overwhelming response from investors.
According to NSE data, the offer garnered bids for 1.67 billion shares against 12.35 million shares available, achieving a staggering subscription rate of 135.88 times.
The qualified institutional buyer (QIB) segment was the most sought-after, subscribing 261.51 times, followed closely by non-institutional investors (NII), who achieved 192.94 times. Retail investors subscribed 39.64 times.
The ₹720-crore offering was entirely constituted of a fresh issue of shares. The capital raised is earmarked for the acquisition and installation of cloud computing and other infrastructure essential for data centers, along with funding general corporate objectives.
Source link: Business-standard.com.
