ESDS Software Solution Limited

ESDS Software Solution Limited is an AI-enabled cloud, managed services, Data Centre infrastructure, and software solutions provider in India. The company operates a comprehensive, end-to-end technology platform consisting of three primary service lines: Infrastructure as a Service (IaaS) (which includes colocation, cloud services, and cloud computing), Managed Services, and Software as a Service (SaaS). ESDS's core value proposition lies in delivering secure, compliant, scalable, and highly reliable cloud environments that enable organizations to migrate their workloads from traditional on-premises setups. Their underlying business model leverages a patented vertical auto-scaling technology, which allows server resources to automatically adjust in real-time to meet customer demands, driving a transparent, pay-per-consumption billing model that differentiates them from global hyperscale competitors.

The company serves a diverse group of end-user industries, categorized into Banking, Financial Services, and Insurance (BFSI),
Government & Public Sector (PSU), and Corporate Enterprises. Target demographics include cooperative and commercial banks requiring secure hosting for core banking applications, government agencies implementing complex digital e-governance platforms, and enterprises migrating workloads to secure community clouds. As of June 30, 2026, their client network supported 104 Government clients using their government community cloud, 115 banks using their BFSI community cloud across 1,045 branches, and 113 enterprises using their SAP HANA community cloud. Geographically, the company operates a robust nationwide network in India and has expanded its international footprint, including providing dedicated high-performance AI cloud compute capacity to support clients in overseas geographies such as Australia.

To support its IaaS and cloud offerings, ESDS operates five state-of-the-art Tier III data centers in India. These facilities are strategically located in Navi Mumbai (Airoli), Nashik, Bengaluru, Mohali, and Noida, covering an aggregate of over 75,266 square feet and interconnected by high-speed Gbps fiber-optic backbone networks. According to independent technical certifications, the company's combined installed capacity as of Fiscal 2026 stood at 1,270.16 TB for cloud servers, 18,795.00 TB for enterprise storage, and 19,631.23 TB for archive storage. The data centers operated at a healthy capacity utilization rate in Fiscal 2026, recording 67.03% (851.41 TB) for cloud servers, 65.38% (12,287.65 TB) for enterprise storage, and 45.56% (8,944.00 TB) for archive storage. ESDS strategically maintains a performance buffer in utilization to ensure uninterrupted service delivery and accommodate unexpected workload spikes or seamless onboarding of new customers.

A primary driver of ESDS's technology moat is its focus on in-house Research and Development (R&D). The company is the only player in India holding US and Indian patents for vertical auto-scaling cloud technology (granted in November 2015 and 2022 respectively), which underpins their "SWARAJ Cloud" platform. This technology enables their "pay-per-consumption" model by scaling resources automatically within a single virtual machine without requiring manual configuration or costly provisioning of excess capacity. Furthermore, ESDS has developed several proprietary software products, including eMagic (a comprehensive data center management and monitoring suite) and VTMscan (an intelligent vulnerability scanner). The company is also driving AI and GPU computing innovation, providing GPU-enabled cloud infrastructure supported by its proprietary SWARAJ AI platform to handle mission-critical AI/ML and Generative AI workloads. These efforts are combined with a strong commitment to environmental sustainability, with plans to transition to 100% renewable energy for their data center operations within the next four years.

As per financial performance, ESDS Software Solution Limited has posted total income / net profits of Rs 292.14 Cr / Rs 13.61 Cr (FY24), Rs 376.64 Cr / 55.61 Cr (FY25) and Rs 480.65 Cr / 120.82 Cr (FY26). So as per previous financials data, the company has shown robust growth in revenues and profitability, with revenues expanding at a CAGR of 30.69% and net profits soaring at an outstanding CAGR of 197.85% over the three-year period, while successfully reducing its total outstanding debt from Rs 149.04 Cr in FY24 to Rs 42.92 Cr in FY26. Company has an average EPS of Rs 8.18 and average RoNW of 17.09% for the last three fiscals. Based on the pre-issue book value, the issue is priced at a Pre-Issue P/BV of 8.15 as per NAV of Rs 52.66 as on 31.03.26. Factoring in the fresh issue proceeds, the Post-Issue P/BV stands at 4.03. If we attribute the latest earnings of Fsis for FY26 and trades at a negative P/E of around -819.78x, making ESDS Software Solution Limited's valuation of 41.62x on FY26 earnings highly attractive given its strong Return on Net Worth of 22.85% and capital efficiency.

On BRLM's front, DAM Capital Advisors Limited and Systematix Corporate Services Limited are associated with this IPO, and DAM Capital Advisors Limited has handled 17 IPOs in the last three fiscal years. (As On 25.08.26)

• 1 Piyush Prakashchandra Somani
• 2 Komal Piyush Somani
• 3 P.O. Somani Family Trust