ESDS Software Solution Limited

Why it matters: Total income growth shows whether demand for the company's products or services is expanding. Fast, consistent growth usually supports a higher valuation.

How it's scored: Compound annual growth of total income between the first and latest full financial years (31 March). Shrinking scores 2, 0–10% 4, 10–20% 6, 20–35% 8, above 35% 9.5.

Why it matters: Profit after tax is what ultimately belongs to shareholders. Growing profits matter more than growing revenue, and a loss-making company carries more risk.

How it's scored: Compound annual growth of profit after tax across full financial years. Loss-making scores 1, falling 2.5, 0–10% 4.5, 10–25% 6.5, 25–50% 8, above 50% 9.5; recently turned profitable scores 6.

Why it matters: Return on equity (ROE, or RoNW) is profit as a share of the owners' capital. It shows how efficiently the business turns money into profit; consistently above 15% is generally considered good.

How it's scored: Latest full-year ROE (or RoNW): negative scores 1, under 8% 3, 8–15% 5.5, 15–25% 7.5, 25% or more 9.

Why it matters: Debt-to-equity compares borrowings with shareholders' funds. High debt raises interest costs and risk when business slows; many IPOs use part of the money to repay debt.

How it's scored: Latest debt/equity ratio: up to 0.1 scores 9.5, 0.5 or less 8, 1 or less 6, 2 or less 4, above 2 scores 2.

Why it matters: The price-to-earnings ratio is how many rupees you pay for each rupee of yearly profit, at the upper price band. Lower is cheaper, but fast-growing sectors normally trade at higher P/Es, so compare with listed peers in the prospectus.

How it's scored: Pre-IPO P/E at the upper band: under 15 scores 9, 15–25 7.5, 25–40 6, 40–60 4, 60–100 2.5, above 100 or loss-making 1.5. It doesn't adjust for the sector.

Why it matters: How much of the company the founders (promoters) still own after listing. A large stake keeps their interests aligned with shareholders. Low holdings are normal for startups backed by private-equity investors, so treat this lightly.

How it's scored: Post-IPO promoter stake: 75% or more scores 8.5, 60–75% 7, 50–60% 5.5, under 50% 4. Low weight in the overall score.

Why it matters: A fresh issue raises new money for the company (growth, debt repayment). An offer for sale (OFS) only lets existing owners cash out. A high OFS share isn't bad in itself, but investors watch it.

How it's scored: Fresh-issue share of the total: 100% scores 9, 75%+ 8.5, 50–75% 7, 25–50% 5, under 25% 3.5, pure OFS 2. Read from NSE's issue-size text.

Why it matters: Larger mainboard issues tend to draw more institutional research and trade more easily after listing. SME issues have lighter disclosure rules, big minimum lots and thinner trading, so they are riskier.

How it's scored: Mainboard: under ₹100 Cr 5.5, ₹100–500 Cr 6.5, ₹500–2,000 Cr 7.5, above 8. SME: 3.5–4.5. Size is estimated from NSE's issue text.

Why it matters: Listing gains depend on the overall market. When most recent IPOs list above their price, sentiment is supportive; a run of weak listings is a warning sign.

How it's scored: Share of same-board IPOs from the last 30 days that listed higher: under 40% scores 2.5, 40–55% 4, 55–65% 5.5, 65–80% 7, above 8.5, plus 1 if the average listing gain exceeds 15%.