Shares of ESDS Software Solution surged 20% on Thursday after a blockbuster stock market debut, with the stock more than doubling from its IPO price within minutes of listing.
ESDS Software Solution shares listed at Rs 757 apiece on the NSE, a 76.5% premium over the IPO price of Rs 429. The stock extended its gains immediately after listing, hitting the 20% upper circuit at Rs 908.40, up 111.5% from the issue price.
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The stock’s rapid ascent added around Rs 1,775 crore to ESDS Software Solution’s market capitalisation in less than five minutes of trading, taking it to over Rs 10,647 crore from around Rs 8,873 crore at listing.
Should you buy, sell or hold ESDS Software Solution shares?
ESDS Software Solution’s bumper listing surpassed already bullish expectations. Rising demand for cloud computing, data-centre infrastructure, cybersecurity and digitalisation in India provides a favourable structural growth opportunity for ESDS over the long term, supporting a constructive medium-to-long-term view even after Thursday’s listing gains, said Shivani Nyati, Head of Wealth at Swastika Investmart.
However, given the scale of the listing-day gain, some near-term profit-taking is likely as valuations have run ahead of fundamentals, the analyst said. “Existing allottees may consider booking partial profits at current levels and maintaining a stop loss around Rs 650–680 on the remaining holding. Investors without allotment would be better served awaiting a pullback toward Rs 600–650 before evaluating a fresh entry,” she added.
The bumper market debut comes after the company's initial public offering saw an overwhelming response during its three days of public bidding, being subscribed around 136 times its offer size between August 28 and September 1. Qualified Institutional Buyers (QIBs) showed the most interest in the issue, subscribing their reserved portion over 261 times. The portions kept for Non-Institutional Investors (NIIs) and retail investors meanwhile were booked around 193 times and 40 times, respectively.
ESDS Software Solution had moved to India’s primary market to raise Rs 720 crore entirely through a fresh issue of shares at a price band of Rs 408–Rs 429 per share. The Company offers infrastructure-as-a-service (IaaS), managed services and software-as-a-service (SaaS), to domestic and overseas customers across BFSI, government and enterprise segments. The company has reported strong revenue and net profit traction over the past three years.
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Before the IPO opened, ESDS Software Solution raised Rs 216 crore from anchor investors. The company allotted 50.34 lakh shares to anchor investors at Rs 429 per share.
