ESDS Software Solution has filed preliminary documents with capital markets regulator Sebi to raise Rs 1,200-1,300 crore through an initial public offering.
According to the draught red herring prospectus, the initial public offering (IPO) would consist of a fresh share issue of 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 (DRHP). South Asia Growth Fund II LP will sell up to 1.68 crore equity shares, GEF ESDS Partners LLC will sell up to 42.31 lakh equity shares, Sarla Prakashchandra Somani will sell up to 4 lakh equity shares, and South Asia EBT Trust will sell up to 34,000 equity shares. The Nashik-headquartered company may pursue a pre-IPO placement of up to Rs 60 crore. If the placement is successful, the size of the new issue will be lowered. The initial share offer, according to merchant banking sources, is projected to raise Rs 1,200-1,300 crore.
The proceeds from the new issuance will be used to acquire cloud computing equipment for the company's data centers, meet long-term working capital requirements, and repay or prepay a portion of the company's term loans, as well as for general business reasons. Piyush Somani founded the digital transformation catalyst and facilitator in 2005. Today, the company operates throughout APAC, Europe, the Middle East, the Americas, and Africa.
Its business model is broadly classified as cloud services, data center services, and product research and development, and it serves customers in the BFSI, healthcare, education, energy & utilities, real estate, information technology and information technology-enabled services, agriculture, manufacturing, entertainment & media, and e-commerce sectors.
Small Industries Development Bank of India, Tata Capital, DCB Bank, Union Bank, and SBI Capital Markets are among the company's customers. For FY21, its total revenue was Rs 174.10 crore, up from Rs 160.53 crore the previous year, and EBITDA was Rs 63.81 crore, up from over Rs 51.72 crore the previous year. The issue's book-running lead managers are Axis Capital and IIFL Securities. CanBank Venture, Canara Bank's wholly-owned subsidiary, invested Rs 25 crore in ESDS Software Solution in 2015.