Those 700 clones would all hit at exactly the same time. That's quite a load for a single server, especially since Mercurial can't be cached that easily.
Mercurial clones can be cached quite easily with 'clonebundles', a Mercurial feature that allows redirecting a clone to instead download a single 'bundle' (which could come from a different server or set of servers).
See https://wiki.mercurial-scm.org/ClonebundlesExtension