ESDS Software files draft papers with Sebi; aims to raise Rs 1,300 crore

Cloud services and data centre firm ESDS Software Solution has filed preliminary papers with capital markets regulator Sebi to raise Rs 1,200-1,300 crore through an initial share sale.

The initial public offering (IPO) consists of fresh share issuance worth Rs 322 crore and an offer for sale (OFS) of up to 2.15 crore equity shares by investors and a member of the promoter group, according to draft red herring prospectus (DRHP).

The OFS comprises sale of up to 1.68 crore equity shares by South Asia Growth Fund II LP, up to 42.31 lakh equity shares by GEF ESDS Partners LLC, up to 4 lakh equity shares by Sarla Prakashchandra Somani and up to 34,000 equity shares by South Asia EBT Trust.

The Nashik-based firm may consider a pre-IPO placement aggregating up to Rs 60 crore. If the placement is completed, the fresh issue size will be reduced.

According to merchant banking sources, the initial share sale is expected to fetch Rs 1,200-1,300 crore.

Proceeds from fresh issuance will be used to purchase cloud computing equipment for the company's data centres, long term working capital requirements as well as repay or prepay some of the term loans and general corporate purposes.

Founded in 2005 by Piyush Somani, the digital transformation catalyst and enabler is present across APAC, Europe, Middle East, The Americas and Africa.

Its business model is broadly classified into cloud services, data centre services and product R&D, and serves customers across BFSI, healthcare, education, energy & utilities, real estate, IT and ITes, agriculture, manufacturing, entertainment & media, e-commerce sectors.

Some of the company's customers include Small Industries Development Bank of India, Tata Capital, DCB Bank, Union Bank and SBI Capital Markets.

For FY21, its total income stood at Rs 174.10 crore against Rs 160.53 crore the previous year and EBITDA for the period under review was Rs 63.81 crore, compared to over Rs 51.72 crore in the preceding year.

Axis Capital and IIFL Securities are the book-running lead managers to the issue.

In 2015, CanBank Venture, the wholly-owned subsidiary of Canara Bank, had invested Rs 25 crore in ESDS Software Solution.