The data center boom has spawned one of India's best IPOs: ESDS has risen more than 300% since listing, and analysts continue to be bullish

The Zhitong Finance App learned that India's pursuit of listed data centers and AI targets has taken a new interest, and investors are already searching for who is next. ESDS Software Solution Ltd. has surged more than 300% since listing and trading on September 4, and is expected to be among the top performing IPOs in India. This round of gains could boost the release prospects for data center operator Sify Infinit Spaces Ltd., Yotta Data Services Pvt., which operates India's largest Nvidia AI chip cluster, and STT Global Data Centres India Pvt.

“The success of ESDS makes more reason for more similar companies to go public and finance,” said Avinash Gorakshakar, founder of Avinash Mentor Research in Mumbai.

Despite having a stock market of around $5 trillion, there are relatively few ways investors can gain meaningful exposure to cloud computing, data centers, and AI infrastructure — sectors that are driving the global investment boom. This scarcity has turned ESDS and companies that supply the data center ecosystem (including fiber manufacturers Sterlite Technologies Ltd. and HFCL Ltd.) into alternative targets for this theme. Sterlite shares have soared more than 700% this year, while HFCL has more than tripled.

“As data centers and their associated infrastructure are one of the few hot topics in India, investors are pricing at least the next two years of growth,” Gorak Shakar said.

According to Choice Institutional Equities analyst Kunal Bajaj, ESDS's revenue could more than triple, from 4.7 billion rupees to nearly 23 billion rupees in the fiscal year ending March 2027. Bajaj, the only analyst tracking the stock, said he plans to revise its target price of Rs 1,550 after the company reports quarterly results on Thursday.

A key driver of this growth forecast is the company's $1.25 billion cloud capacity agreement with SharonAI Holdings Inc. (SHAZ.US). The deal involved the deployment of 8,000 GPUs in one of the latter (a NASDAQ listed company)'s existing data centers in Australia.

According to Bajaj, based on the IPO offering price of 429 rupees, ESDS's corporate value is 2.1 times the estimated revenue for the fiscal year ending March 2028, compared to 11 times that of the same industry E2E Networks Ltd. E2E shares have tripled this year.

Investors' enthusiasm was evident even before trading began. ESDS's $80 million IPO received 136 times the subscription; data shows that its strong rise since listing made it one of the strongest performers among Indian IPOs raised at least $20 million in a month.