Shares of ESDS Software Solution hit a 5% lower circuit for the sixth consecutive session on Monday. The sell-off follows the expiry of a one-month pre-IPO lock-in period, which released 2.5 million shares into the market. Investors are also reassessing the stock's valuation after a recent sharp decline in quarterly profits.
On Monday, October 5, 2026, shares of ESDS Software Solution hit a 5% lower circuit at ₹1,360.15, marking the sixth consecutive trading session of losses. This sustained selling pressure has been triggered by the end of the company's one-month pre-IPO lock-in period, which allowed early shareholders to sell their holdings in the secondary market.
With the lock-in expiry, approximately 2.5 million shares—representing roughly 2.5% of the company's total outstanding equity—have become eligible for trading. When a large volume of stock suddenly enters the tradable pool, it often creates a supply overhang, leading investors to offload shares ahead of potential price drops.
The current decline follows a period of cooling sentiment after the company’s recent financial update. On September 24, ESDS Software reported its Q1 FY27 earnings, which revealed a 57% sequential drop in net profit to ₹29.3 crore. Revenue for the same period also recorded a 20.2% sequential decline. These weaker-than-expected financial numbers have caused investors to re-evaluate the company's valuations, particularly after the stock’s aggressive rally following its September 4 listing at an issue price of ₹429 per share.
Due to the high volatility observed during these sessions, the stock has been placed under the Additional Surveillance Measure (ASM) framework by the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). This regulatory mechanism is used to alert market participants about unusual price movements.
While the stock price remains significantly higher than its initial public offering (IPO) issue price of ₹429, the combination of newly unlocked shares and slowing financial performance has kept the stock under pressure. Investors will likely monitor whether the selling volume stabilizes in the coming sessions and will look for future updates on the company's operational recovery in subsequent quarters.