ESDS Software shares hit 112% gain after blockbuster debut
What's the story
ESDS Software Solution's shares made a stellar debut on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) today. The company's shares listed at ₹757 on NSE, a premium of 76.46% over the issue price. On BSE, they were listed at ₹746.30 per share, a premium of 73.96%. The strong listing was backed by robust demand in the primary market where its IPO was subscribed 136 times between August 28 and September 1.
Market impact
Market cap soars by ₹1,900 crore
Following the listing, ESDS Software's market capitalization jumped by ₹1,899.99 crore to ₹10,647.44 crore from ₹8,747.45 crore.
The company's shares were locked in a 20% upper circuit at ₹908.40 per share on NSE, up 111.75% from the issue price of ₹429 per share.
Shivani Nyati, Head of Wealth at Swastika Investmart, advised existing allottees to book partial profits at current levels and maintain a stop-loss around ₹650-680 on their remaining holding.
Investment strategy
Wait for pullback before fresh entry
Nyati also advised investors without allotment to wait for a pullback toward ₹600-650 before considering a fresh entry.
She said the growing demand for cloud computing, data center infrastructure, cybersecurity, and digitalization in India presents a favorable long-term growth opportunity for ESDS.
However, she warned that some near-term profit-taking is likely as valuations have run ahead of fundamentals due to the scale of listing-day gains.
Business outlook
Long-term prospects remain strong
Dr. Ravi Singh, Chief Research Officer from Master Capital Services, also noted that ESDS Software Solution's long-term business prospects remain relevant.
He said the rising demand for cloud, data centers, and AI infrastructure could drive growth in the coming years.
Singh advised investors who received allotted shares to book partial profit and hold the rest for the long term while those who missed out on shares in IPO may buy when prices come down.
IPO details
ESDS Software's ₹720 crore IPO
The ₹720-crore IPO of ESDS Software Solution was entirely a fresh issue of equity shares with a price band of ₹408-429 per share.
The company plans to use ₹576 crore from the IPO proceeds for purchasing and installing cloud computing equipment and other infrastructure for its data centers.
The rest will be used for general corporate purposes, further strengthening its position in the market.