Daijiworld Media Network - Mumbai
Mumbai, Sep 23: India’s growing appetite for data-centre and artificial-intelligence infrastructure stocks has come into sharp focus following the spectacular debut and subsequent rally in ESDS Software Solution Ltd., raising expectations around a pipeline of potential listings in the sector.
ESDS Software Solution, which made its stock-market debut on September 4, has emerged as one of the strongest-performing new listings of the year. The company’s shares listed at Rs 757 against an issue price of Rs 429 and subsequently surged more than threefold from the offer price. The stock had gained about 325 per cent within seven trading sessions, although it later experienced sharp volatility, including consecutive lower circuits.
The strong market response has drawn attention to other data-centre and AI-infrastructure companies that could potentially tap the Indian capital markets, including Sify Infinit Spaces Ltd., Yotta Data Services Pvt. Ltd. and STT Global Data Centres India Pvt. Ltd.
“ESDS’s success strengthens the case for more such companies to tap the market,” said Avinash Gorakshakar, founder of Avinash Mentor Research in Mumbai.
Despite India having an equity market valued at around $5 trillion, investors have relatively limited listed opportunities to gain direct exposure to cloud computing, data centres and AI infrastructure. These sectors are attracting substantial investment globally as companies expand computing capacity to support artificial intelligence and other digital services.
The limited availability of listed companies focused on the theme has also made firms supplying the wider data-centre ecosystem, including fibre-optic manufacturers Sterlite Technologies Ltd. and HFCL Ltd., important market proxies for the sector. Sterlite Technologies’ shares have risen more than 700 per cent this year, while HFCL has more than tripled, according to market data cited in the report.
“Investors are pricing at least the next two years of growth as data centres and their related infrastructure are among the few hot themes in India,” Gorakshakar said.
ESDS, based in Nashik, provides cloud infrastructure, managed services, data-centre infrastructure and software solutions. Its portfolio includes infrastructure-as-a-service, data-centre and colocation services, public and private cloud offerings, GPU-as-a-service and software-as-a-service solutions. The company operates data centres in Airoli, Bengaluru, Nashik, Noida and Mohali and has proposed facilities in Kolkata and Sahibabad.
The company reported consolidated revenue of Rs 472.21 crore and a net profit of Rs 120.82 crore for the financial year ended March 31, 2026. Revenue had risen from Rs 361.33 crore in the previous financial year. Around 27.4 per cent of its revenue was derived from government entities.
According to Kunal Bajaj of Choice Institutional Equities, ESDS’s revenue could more than quadruple to nearly Rs 2,300 crore in the financial year ending March 2027, compared with about Rs 470 crore in the previous year. Bajaj, who was cited as the lone analyst tracking the stock, had a price target of Rs 1,550 and was expected to review his estimates following the company’s quarterly results.
ESDS is scheduled to announce its first-quarter financial results on September 24.
A major factor behind the projected growth is ESDS’s five-year, $1.25-billion AI cloud infrastructure agreement with Australia-based neocloud company Sharon AI. Under the agreement, around 8,000 Nvidia B300 GPUs are to be deployed at an existing Australian data centre, with revenue from the arrangement expected to begin in the third quarter of 2026. The agreement also contains an option for a further two years.
ESDS’s initial public offering, which was entirely a fresh issue of Rs 720 crore, was subscribed 135.88 times. The company had fixed the price band at Rs 408-Rs 429 a share. Of the funds raised, around Rs 576 crore was earmarked for the purchase and installation of cloud-computing equipment and other infrastructure for data centres, with the remaining proceeds intended for general corporate purposes.
The IPO had already attracted strong investor interest before listing. ESDS raised about Rs 216 crore from anchor investors on August 27, with 50.34 lakh shares allotted to 19 anchor investors at Rs 429 apiece.
At the IPO price of Rs 429, ESDS’s enterprise value was estimated at about 2.1 times projected revenue for the financial year ending March 2028, compared with around 11 times for listed peer E2E Networks, according to Bajaj. E2E Networks has also recorded a sharp rise in its share price this year.
The ESDS listing has therefore brought renewed market attention to India’s expanding data-centre ecosystem, as companies seek to build computing capacity to meet the rapidly growing demand for cloud services, AI workloads and high-performance GPU infrastructure.
The strong debut, however, has also been accompanied by considerable share-price volatility, highlighting the difference between the rapid expansion of the underlying sector and the short-term movements of individual stocks.