The ESDS Software Solution IPO will open for subscription today, August 28, 2026, giving investors a three-day window to submit their bids. The issue has already attracted significant grey-market interest, with the shares commanding a premium of around 76%, indicating expectations of a potentially strong listing.The company has set the IPO price band at Rs 408–429 per share for its Rs 720-crore public offering. The subscription window will remain open from August 28 to September 1, 2026. The IPO consists entirely of a fresh issue of 1.68 crore shares.Investors can bid for a minimum of 34 equity shares, and in multiples of 34 shares thereafter. At the upper end of the price band, retail investors will need to invest Rs 14,586 for one lot of 34 shares.The allotment is expected to be finalised on September 2, 2026, while the shares are likely to list on the NSE and BSE on September 4, 2026, subject to the IPO schedule remaining unchanged.At the upper end of the price band, ESDS Software Solution's FY2026 price-to-earnings (P/E) ratio stands at 36.33 times, while at the lower end it is 34.55 times. This compares with an average industry peer-group P/E ratio of 819.78 times and a Nifty 50 P/E ratio of 20.48 times as of August 20, 2026.On the EV/EBITDA valuation metric, the company's multiple stands at 16.30 times at the upper price band and 15.40 times at the lower price band for FY2026. This compares with an average industry peer-group EV/EBITDA ratio of 99.49 times. Meanwhile, ESDS Software Solution reported a weighted average return on net worth of 17.09% over the last three fiscal years.DAM Capital Advisors Ltd. is the book-running lead manager, while MUFG Intime India Pvt. Ltd. is the registrar to the issue.ESDS Software raises Rs 216 crore from anchor investorsESDS Software Solution raised Rs 216 crore from anchor investors. The company allotted 50.34 lakh shares to anchor investors at Rs 429 per share.ESDS Software Solution IPO ProceedsThe proceeds from the ESDS Software Solution IPO will primarily be utilised to expand and strengthen the company’s data centre infrastructure. Approximately Rs 576 crore is proposed to be allocated towards the purchase and installation of cloud computing equipment and other data centre infrastructure.The balance of the IPO proceeds will be used for general corporate purposes, providing the company with flexibility to meet its broader business and operational requirements.Financial PerformanceESDS Software Solution Ltd. reported a significant improvement in its financial performance in FY26. Total income increased 28% year-on-year to Rs 480.65 crore, compared with Rs 376.64 crore in FY25.Profitability improved even more sharply, with profit after tax (PAT) more than doubling to Rs 120.82 crore, up 117% from Rs 55.61 crore in the previous year. The strong growth in both revenue and profitability reflects a notable improvement in the company’s financial performance during FY26.About ESDS Software SolutionIncorporated in August 2005, ESDS Software Solution Limited is an AI-enabled provider of cloud, managed services, data centre infrastructure and software solutions in India. The company offers an end-to-end portfolio spanning Infrastructure-as-a-Service (IaaS), managed services and Software-as-a-Service (SaaS), catering to customers across the BFSI, government and enterprise segments. In FY26, the company served 2,501 customers and recorded revenue from operations of Rs 4,722.10 million.Its IaaS portfolio covers colocation and data centre services, as well as public, private, virtual private, hybrid and community cloud solutions and GPU-as-a-Service (GPUaaS). ESDS operates five Tier 3 data centres across India, spanning more than 75,266 sq. ft. These facilities are supported by redundant power systems, disaster recovery infrastructure and round-the-clock services.The company’s managed services portfolio includes cloud and data centre management, cybersecurity, IT infrastructure and network management, backup and disaster recovery, database management and DevOps services.Read more: FPIs raise India bets in August, DIIs continue buying amid cautionESDS also develops proprietary technology solutions, including SWARAJ Cloud, its patented cloud autoscaling technology. The platform has evolved into an AI-enabled cloud solution focused on data sovereignty, scalability, security, compliance and AI capabilities. Its SaaS offerings include data centre management tools, vulnerability scanners, web access firewalls, VPN solutions and AI-powered GPU monitoring solutions.As of June 30, 2026, the company had 993 employees supporting its data centre operations, cloud infrastructure, security management, research and development, sales, service delivery and other functions.Should you subscribe?According to a research report by Anand Rathi, ESDS Software Solution is well placed to benefit from the growing adoption of cloud infrastructure, managed services and AI-driven workloads in India. Its integrated service offerings, expanding data-centre infrastructure, and focus on GPU-as-a-Service (GPUaaS) and AI-led solutions could support future growth.However, the company operates in a highly competitive and technology-intensive market, facing increasing competition from global cloud giants as well as domestic data-centre and cloud service providers. Customer concentration, reliance on government projects and the need for continued investments in infrastructure and technology also warrant a cautious approach to valuation in the near to medium term.At the upper end of the price band, ESDS is valued at 41.6 times its FY26 earnings, translating into a post-issue market capitalisation of ₹50,284 million. Anand Rathi believes the company’s strong growth prospects in India’s cloud and AI infrastructure market, integrated offerings and improving profitability provide some justification for the premium valuation.Overall, Anand Rathi has assigned a “Subscribe – Long Term” rating to the IPO, citing the company’s long-term growth potential despite the associated risks.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)