Shares of ESDS Software Solution extended their post-listing rally, hitting the 20% upper circuit following a strong debut on the market after its initial public offering (IPO).

The stock has surged sharply above its issue price of Rs 429, building on the momentum generated since listing. An upper circuit is an exchange-imposed ceiling on how far a stock can rise in a single session, and a 20% circuit lock-in signals heavy unmet buying demand.

Adding to the positive coverage of the counter, Choice Institutional Equities has initiated coverage of the stock with a Buy rating and a target price of Rs 1,550. In its note, the brokerage cited the company's strong artificial intelligence (AI) infrastructure capabilities and cloud growth prospects as key factors behind its bullish stance.

ESDS Software Solution is a Nashik-based provider of cloud hosting, data centre, and managed IT services, and its listing comes as investor interest in India's data centre and AI infrastructure segment has grown, with brokers pointing to cloud adoption and AI workloads as demand drivers for such service providers.

ESDS Software Solution listed on the exchanges after an IPO that drew strong investor interest, and the shares have continued to climb since the debut. Post-listing analyst coverage, such as Choice Equities' initiation, typically begins once a stock is publicly tradable, and further coverage decisions by other brokerages will be among the factors market watchers track as the stock settles after its IPO.

Source: Economic Times Markets