What’s really going on with ESDS?

In today's Finshots, we explain why ESDS Software Solution shares fell into consecutive lower circuits after a sharp rally and unpack its $1.25 billion AI contract.But before we begin, if you’re someone who loves to keep tabs on what’s happening in the world of business and finance, then hit subscribe if you haven’t already.

We strip stories off the jargon and deliver crisp financial insights straight to your inbox. Just one mail every morning. Promise!If you’re already a subscriber or you’re reading this on the app, you can just go ahead and read the story.The StoryESDS Software Solution has had a rather extraordinary journey since it went public.It went public last month, giving investors a 76% gain on day one of listing. But that was just the beginning.

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Over the next few weeks, the stock surged by roughly 310% above its IPO price, pushing its market capitalisation close to ₹16,000 crore.And it’s easy to see why everyone was excited. ESDS operates at the intersection of three of the biggest technology trends in India right now:Cloud computing, Data centres, and Artificial intelligence.But ESDS isn't simply another company putting servers in a building and renting out space. It has spent more than two decades building a combination of hosting, cloud infrastructure, and managed services for banks, government organisations, and enterprises that need secure, reliable, compliant infrastructure.It operates something called “community clouds” for over a hundred banks and even the government.