ESDS Plans ₹576 Crore Upgrade Yet Has No Equipment Orders

ESDS plans a ₹576 crore data-centre upgrade across Airoli, Bengaluru, Mohali and Nashik in Fiscals 2027 and 2028, financed from IPO net proceeds. The plan would take GPU server capacity to 2,481 teraflops from 81 as of June 30, 2026, yet ESDS had placed no orders or definitive vendor agreements.

What will ESDS spend the ₹576 crore data-centre upgrade budget on?

ESDS plans to spend ₹576 crore on computer servers, data-storage devices, networking equipment and supporting infrastructure at its four Relevant Data Centres. The estimated amount excludes goods and services tax, with ESDS stating that applicable taxes, delivery charges, transport, implementation, maintenance and other levies will be met from internal accruals.

The ₹576 crore programme is the specified use of proceeds from a fresh issue seeking gross proceeds of up to ₹720 crore. The remaining net proceeds are proposed for general corporate purposes, although that amount had not been finalised; under the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations, general corporate purposes cannot exceed 25% of gross proceeds.

Computer servers account for ₹266 crore of the programme, comprising 80 cloud nodes quoted at ₹96 crore and 20 GPU cloud systems quoted at ₹170 crore. ESDS says the additional GPU servers are intended to support artificial-intelligence and machine-learning workloads, including model training and inference, while also supporting its GPU-as-a-Service offering.

How does the ESDS upgrade compare with earlier data-centre spending?

The ₹576 crore ESDS upgrade is larger than the company’s reported data-centre capital expenditure in each of the preceding three fiscals. ESDS spent ₹79.03 crore in Fiscal 2026, ₹110.81 crore in Fiscal 2025 and ₹19.68 crore in Fiscal 2024, whereas the proposed programme is scheduled over Fiscals 2027 and 2028.

The planned ₹576 crore outlay is more than seven times Fiscal 2026 data-centre capital expenditure and more than five times the Fiscal 2025 amount, which was the highest of the three reported years. ESDS expressly says its historical capital expenditure may not reflect future plans because the proposed budget is based on its business plan, management estimates, current vendor quotations and an August 24, 2026 certificate from Apt Data Center Consultants India LLP.

ESDS reported ₹472.21 crore in revenue from operations in Fiscal 2026, making the proposed equipment budget larger than that year’s revenue. The prospectus does not say the full programme will be funded by operating cash generation: IPO net proceeds are earmarked for the ₹576 crore equipment object, while taxes and any cost increases are to be paid from internal accruals.

How much computing and storage capacity would ESDS add?

ESDS expects the purchases to raise GPU server capacity to 2,481 teraflops from 81 teraflops as of June 30, 2026, an increase of more than 30 times. The capacity target depends on ESDS procuring and installing the proposed GPU server configuration at the Airoli, Bengaluru, Mohali and Nashik data centres.

Cloud-server RAM capacity is projected to rise by 184 terabytes to 1,458 terabytes from 1,274 terabytes, while GPU-server RAM capacity is projected to increase by 48 terabytes to 66 terabytes from 18 terabytes. These capacity estimates were certified by Apt Data Center Consultants India LLP in its August 24, 2026 certificate.

ESDS also expects enterprise storage to increase to 21,371 terabytes from 18,795 terabytes and archive storage to reach 26,543 terabytes from 19,631 terabytes. GPU storage, which was nil as of June 30, 2026, is projected at 2,000 terabytes after the purchase of data-storage devices funded from the proposed proceeds.

The ₹175 crore infrastructure allocation is designed to accommodate the added servers, storage and networking equipment. Its listed components include server racks, power distribution units, building-management-system software integration, cooling systems, uninterruptible power supplies, transformers, high-tension and low-tension panels, diesel-generator sets and cabling.

Why does the ESDS upgrade still depend on future vendor orders?

The ESDS upgrade remains dependent on future vendor negotiations because ESDS had not placed equipment orders or entered definitive agreements with vendors as of the red herring prospectus date. ESDS says it cannot assure that the suppliers providing quotations will ultimately be engaged, or that equipment will be available at the quoted costs.

Orient Technologies Limited provided the July 24, 2026 quotations for the ₹266 crore server category, ₹83.36 crore storage category and ₹51.64 crore networking category, and those quotations were valid for four months from their date. The disclosed infrastructure quotations had validity periods of 180 days or six months, depending on the supplier and location, while all figures remained subject to final price, payment terms, credit terms, quantities and delivery schedules.

ESDS identifies changes in equipment configurations and models, market pricing, vendor negotiations, business and market conditions, interest rates and exchange rates as factors that may require a revision or rescheduling of expenditure. It also states that delayed order placement or a vendor’s inability to supply equipment on time, or at all, could cause time and cost overruns.

The proposed deployment schedule allocates ₹432 crore to Fiscal 2027 and ₹144 crore to Fiscal 2028. Of the Fiscal 2027 amount, ₹199.50 crore is for servers, ₹62.52 crore for storage, ₹38.73 crore for networking and ₹131.25 crore for infrastructure; ESDS says the schedule is based on management estimates and is subject to final vendor orders.

If actual equipment costs exceed the ₹576 crore estimate, ESDS says it will use internal accruals and may explore additional debt from existing or other lenders. ESDS had not raised bridge loans as of the prospectus date, but disclosed that it may consider secured or unsecured loans, non-convertible debentures or commercial paper pending receipt of IPO proceeds.

Conclusion

ESDS is proposing a material step-up in data-centre investment, with ₹576 crore scheduled across two fiscals against ₹79.03 crore of data-centre capital expenditure in Fiscal 2026. The plan is concentrated in ₹266 crore of servers and ₹175 crore of infrastructure, and its reported capacity outcome is a rise in GPU computing power from 81 to 2,481 teraflops.

The next matters to watch are final equipment orders, supplier selection, pricing and delivery terms, followed by the planned ₹432 crore deployment in Fiscal 2027. Because the proposed fresh issue exceeds ₹100 crore, ESDS is required to appoint a monitoring agency, which will report quarterly until gross proceeds are fully utilised, while ESDS must disclose quarterly deviations and category-wise variations in use of proceeds.