Fractal Analytics sets IPO price band at Rs 857-900, becomes India's first pure-play AI listing

India's Fractal Analytics sets IPO price band, eyes $1.6 billion valuation

Feb 4 (Reuters) - Indian enterprise artificial intelligence firm Fractal Analytics FRAL.NS set a price band of 857-900 rupees per share for its initial public offering, targeting a valuation of about 144.5 billion rupees ($1.60 billion), according to Reuters calculations. Fractal will launch its IPO for retail investors on February 9, while anchor investors can bid on February 6, according to a newspaper advertisement on Wednesday, as the company positions itself to become the country's first pure-play AI-focused listed firm. Bidding will close on February 11. Fractal is set to list in a subdued domestic primary market this year. Only three companies launched mainboard IPOs in January, down from 10 in December, amid weak market conditions driven by trade and geopolitical uncertainties. However, investment bankers expect 2026 to be a milestone year for India's primary market, following two consecutive years of record fundraising. Fractal cut its issue size by over 40% to 28.34 billion rupees ahead of the offering. Founded in 2000, the Mumbai-based AI and analytics company counts some of the world's largest technology and consumer firms, including Microsoft (MSFT.O), opens new tab, Apple (AAPL.O), opens new tab, Nvidia (NVDA.O), opens new tab, Alphabet (GOOGL.O), opens new tab, and Tesla (TSLA.O), opens new tab, among its clients, the prospectus showed. IPO proceeds will be used to repay debt at its U.S. subsidiary, set up new offices in India and fund research and development, with a focus on generative artificial intelligence. Shares of Fractal will list on the Indian bourses on or about February 16. ($1 = 90.4270 Indian rupees) Reporting by Komal Salecha and Meenakshi Maidas in Bengaluru; Editing by Eileen Soreng Our Standards: The Thomson Reuters Trust Principles., opens new tab

India's Fractal Analytics cuts IPO size by over 40% to $314 million

Feb 3 (Reuters) - Indian enterprise artificial intelligence firm Fractal Analytics has cut the size of its initial public offering by over 40% to $313.6 million, ahead of the launch of the issue next week. The Mumbai-based firm, set to become India's first listed pure-play AI company, trimmed the IPO size to 28.34 billion rupees from 49 billion rupees, according to its prospectus released on Monday. Fractal did not immediately respond to a Reuters request for comment on the reason for reducing the issue size. The IPO comes in a subdued primary market this year. Only three companies launched mainboard IPOs in India in January, down from 10 in December amid weak market conditions driven by trade and geopolitical tensions. However, investment bankers expect 2026 to be a milestone year for India's primary market, following two consecutive years of record fundraising. Fractal Analytics' IPO comprises a fresh issue of up to 10.24 billion rupees and offer-for-sale of 18.10 billion rupees by existing investors. The company will launch the IPO for retail investors on February 9, the prospectus showed, while anchor investors can submit bids on February 6. Bidding will close on February 11. Founded in 2000, the AI and analytics company counts some of the world's largest technology and consumer firms, including Microsoft (MSFT.O), opens new tab, Apple (AAPL.O), opens new tab, Nvidia (NVDA.O), opens new tab, Alphabet (GOOGL.O), opens new tab, and Tesla (TSLA.O), opens new tab, among its clients. Nearly two-thirds of the IPO will involve big investors trimming their stakes, with TPG Fett Holdings seeking to offload shares worth up to 4.5 billion rupees and Quinag Bidco planning to sell shares worth up to 8.81 billion rupees. Fractal Analytics' co-founders, group CEO Srikanth Velamakanni and CEO Pranay Agrawal, along with their families, own about 20% of the company and are not participating in the offer-for-sale. Proceeds will be used to repay debt at its U.S. subsidiary, set up new offices in India and fund research and development, with a focus on generative AI. ($1 = 90.3700 Indian rupees) Reporting by Komal Salecha in Bengaluru; Editing by Sonia Cheema Our Standards: The Thomson Reuters Trust Principles., opens new tab

Rs 2 lakh crore IT rout meets India's first AI IPO: Is Fractal a better bet than TCS, Infosys and HCL Tech?

Fractal Analytics' IPO launches amid Indian IT sector worries about AI automation. While traditional IT stocks face a sharp sell-off, Fractal offers a pure-play AI investment. Its focus on enterprise AI and analytics solutions differentiates it from legacy firms. Investors weigh the high-growth AI theme against execution risks and evolving technology paradigms. Fractal Analytics' IPO is opening at a time when the Indian IT sector is facing one of its sharpest bouts of anxiety in years. Over the past two sessions, stocks of large IT services companies such as TCS, Infosys and Wipro have fallen sharply after the launch of new AI tools by Anthropic raised fears that automation could disrupt the labour-heavy outsourcing model that has powered India's IT success for decades. Against this uneasy backdrop, the impact on Fractal's public offer is likely to be seen, but given that it is a bet on a pure-play AI company rather than a traditional software company, will that be the playbook going forward and, if yes, where does Fractal fit in? The recent sell-off in IT stocks was triggered after Anthropic launched "Cowork" plugins for its Claude AI agent, designed to automate tasks across legal, corporate, sales and data analysis workflows. The move rattled markets globally, with investors worrying that AI could significantly reduce billable hours and human dependency in professional services. In India, the Nifty IT index saw one of its steepest falls since the Covid crash, wiping out nearly Rs 2.5 lakh crore in market value in the last five days. This fear-driven correction has arrived just days before Fractal Analytics opens its Rs 2,834 crore IPO on February 9, positioning it in the eye of the storm created by AI-led disruption. According to Abhinav Tiwari, Research Analyst at Bonanza, the sell-off reflects deep investor anxiety about the future of traditional IT outsourcing. He notes that Anthropic's tools have intensified concerns that AI could replace labour-intensive workflows such as contract review, data analysis and routine coding. However, Tiwari argues that while this disruption creates short-term nervousness for technology stocks, it does not impact all players equally. Fractal, he says, is positioned very differently from legacy IT firms. "Unlike traditional IT companies that rely heavily on large teams and billable hours, Fractal focuses on enterprise AI and analytics solutions. Its core business is aligned with automation rather than threatened by it," he explains. That distinction is central to how investors may look at Fractal's IPO. While the broader IT sell-off could dampen near-term sentiment and risk appetite, Fractal's positioning as India's first pure-play AI company offers direct exposure to the very technology that is unsettling traditional software models. The company provides AI-driven decision intelligence solutions to global enterprises across healthcare, finance, retail and consumer sectors, with clients including Microsoft, Apple, Nvidia, Amazon, Alphabet and Meta. More than 65% of its revenue comes from the US, placing it firmly within the global AI adoption cycle. "With a total addressable market estimated at around Rs 12.9 lakh crore and the potential to capture a meaningful share over time, the long-term growth runway appears significant. That differentiation with traditional software companies could make it an interesting opportunity for long-term investors looking to diversify within the technology space," said Abhishek Jain, Head of Research, Arihant Capital Markets. Still, the timing of the IPO does carry risks. Sourav Choudhary, Managing Director at Raghunath Capital, points out that public market investors are currently reassessing technology valuations amid slowing global spending and rapid technological change. "Most new-age technology companies go through long gestation periods before achieving stable and predictable cash flows. AI-led businesses are no exception," he says. Choudhary cautions that while enterprise AI is a powerful long-term theme, execution remains critical. "The challenge for Fractal will be how effectively it adapts to shifting technology paradigms, monetises innovation and continues to service global clients amid intensifying competition," he adds. In contrast, large IT services companies benefit from scale, diversification and decades of execution experience, which provide stronger earnings visibility during volatile phases. This contrast highlights the core trade-off investors face today. Traditional IT companies offer stability, cash flow predictability and lower execution risk, but are increasingly seen as vulnerable to AI-led pricing pressure and margin compression. AI-focused companies like Fractal, on the other hand, offer exposure to high-growth themes but come with higher valuation sensitivity and longer payback periods. Analysts note that the company is still being valued with caution. The pricing leaves room for uncertainty around long-term monetisation, especially as AI technologies evolve rapidly and competition intensifies globally. What works in Fractal's favour is its long operating history. Founded in 2000, the company has spent over two decades building enterprise relationships and domain expertise, unlike many newer AI start-ups that are yet to prove scalability. Its improving financial profile, return to profitability and focus on decision intelligence rather than generic services also strengthen its investment case. Choudhary emphasises that Fractal's IPO should not be viewed through the same lens as traditional IT valuations. "This is a thematic bet on AI adoption rather than a cyclical services story," he says. However, he adds that public market investors are likely to remain selective until sustained cash flow generation becomes more visible. "Rather than viewing it as a substitute for traditional IT, it can be seen as a complementary play that offers exposure to the evolving AI ecosystem while still benefiting from a stable, established core business," Jain said. In the near term, broader IT sector volatility could influence subscription sentiment and post-listing performance. Risk-averse investors may prefer to wait for stability, while others may see the current environment as an opportunity to pivot away from legacy software models towards AI-native companies. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)

Fractal Analytics mobilises Rs 1,248 crore from anchor investors; IPO to open on February 9 - The Economic Times

Artificial intelligence (AI) solutions provider Fractal Analytics on Friday garnered Rs 1,248.26 crore from anchor investors, days before the opening of its initial public offering (IPO). The anchor book saw broad-based participation from a mix of leading domestic and global institutional investors, reflecting robust demand for the issue. According to a circular uploaded on the website of BSE, domestic institutional investors participating in the anchor round included mutual funds SBI MF, ICICI Prudential MF, Motilal Oswal MF and UTI MF, and insurance companies LIC, HDFC Life Insurance Company, SBI Life Insurance Company and Bharti AXA Life Insurance Company. Global investor interest was equally strong, with participation from long-only and institutional investors such as Morgan Stanley Investment Funds, Ashoka WhiteOak Emerging Markets Funds, Jupiter Global Fund, Goldman Sachs Bank Europe, Societe Generale (ODI) and Flumen Investment Trust. As per the circular, Fractal Analytics allotted 1.39 crore equity shares to 52 anchor investors at Rs 900 per share. The company's Rs 2,834-crore maiden public offering will open for subscription on February 9 and conclude on February 11. The price band has been fixed at Rs 857 to Rs 900 per share, valuing the company at nearly Rs 15,500 crore. Fractal has scaled down the size of its IPO from the Rs 4,900 crore it had initially proposed. The revised offer comprises a fresh issue of equity shares worth up to Rs 1,023.5 crore and an offer for sale (OFS) of Rs 1,810.4 crore, taking the total issue size to Rs 2,833.9 crore. In its draft papers filed in August, the company had planned to raise Rs 4,900 crore through the public issue. Those selling shares in the OFS include Quinag Bidco Ltd, TPG Fett Holdings Pte. Ltd, Satya Kumari Remala Rao, Venkateswara Remala and GLM Family Trust. Fractal plans to use the proceeds from fresh issue to invest in its subsidiary, Fractal USA, for pre-payment or repayment of its borrowings; buy laptops; set up new offices in India; invest in research and development; support sales and marketing under Fractal Alpha; fund acquisitions and other strategic initiatives; and for general corporate purposes. The company will make its stock market debut on February 16. According to the company, 75 per cent of the issue size has been reserved for qualified institutional buyers, 15 per for non-institutional investors and the remaining 10 per cent for retail investors. Fractal, which was co-founded by Srikanth Velamakanni and Pranay Agrawal in 2000, supports large global enterprises across multiple industry verticals and business functions with data-driven insights and assists in decision-making through end-to-end AI solutions. Backed by marquee investors like TPG, Apax, Gaja, Fractal is a leading pure play data and artificial intelligence company and has domain expertise spanning across consumer packaged goods undefined technology, media and telecom; healthcare and life sciences and banking, financial services and insurance. As per its industry report, it is uniquely placed among other industry players with active investments in expanding its AI and Gen AI software portfolio and R&D activities. As on March 31, 2025, the firm served global companies which include Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta and Tesla. Kotak Mahindra Capital Company, Morgan Stanley India Company, Axis Capital and Goldman Sachs (India) Securities have been appointed by Fractal to manage its maiden public issue.

Private funds assess AI better than public investors: Fractal Analytics CEO on discounted IPO pricing - The Economic Times

Fractal Analytics, which is expected to be the first pureplay Indian artificial intelligence (AI) company to tap the country's public markets, has priced its initial public offering (IPO) at about a 26% discount to its most recent private market valuation.Fractal Analytics, which is expected to be the first pureplay Indian artificial intelligence (AI) company to tap the country's public markets, has priced its initial public offering (IPO) at about a 26% discount to its most recent private market valuation. In an interaction with ET, cofounder and group chief executive Srikanth Velamakanni said this is because public market players assess AI firms very differently from specialised private investors, who are deeply thematic and spend considerable time understanding the category. Public market investors, on the other hand, tend to compare companies across a wide range of sectors, from steel and cement to technology. He added that Fractal could have raised capital at a higher valuation in the private markets. "There is a much deeper understanding of the space in the private market. We are talking about a few large funds with strong talent that spend a lot of time with you," Velamakanni said. "In the public markets, investors are obviously looking at thousands of companies." He added that educating Indian public market investors about how AI companies differ from traditional technology services firms would take time. The company has fixed its IPO price at Rs 857-900 per share, valuing it at around $1.71 billion on a post-money basis at the upper end of the band. Fractal Analytics was last valued at $2.44 billion in July 2025, when it raised $170 million from Trust Investment Advisors, White Oak Capital Management, Gaja Capital, and Neo Asset Management. The company has also reduced the overall IPO size by about 42% to Rs 2,834 crore from its earlier plan of Rs 4,900 crore, largely by cutting the offer-for-sale (OFS) component after existing investors decided to sell fewer shares at the discovered price, according to Velamakanni. Of the total fundraise, Rs 1,023.5 crore will comprise a fresh issue of equity, while the OFS portion will be worth Rs 1,810.4 crore. Founded in 2000, Fractal enables large enterprises across industries with data-driven insights and end-to-end AI solutions that assist in decision-making. The company has two business segments. Fractal.ai houses its core AI services and AI-led products, through which it builds customised solutions for client-specific use cases. Fractal Alpha focusses on incubating new businesses and integrating acquired companies. Concepts with a strong platform play are absorbed into Fractal.ai, while market-validated and scalable ideas are developed as independent AI businesses within the Fractal Alpha ecosystem. More than 60% of Fractal's revenue is derived from the US market, according to its IPO papers. Commenting on the recent global trade disruptions, Velamakanni said uncertainty had weighed on manufacturing clients over the past year, affecting demand and supply chains. However, sentiment has improved following greater clarity on trade arrangements, particularly the US-India trade deal. "The US has done trade deals across the world, and that has stabilised the environment. Manufacturing companies are now feeling more confident about expanding and increasing their business," he said. For the six-month period ended September 2025, Fractal reported operating revenues of Rs 1,559 crore, compared with Rs 1,300 crore in the same period a year earlier. The company posted a net profit of Rs 70.9 crore during the period, down from Rs 72.9 crore a year prior. "With any investor, we have an unwritten psychological contract about what we will do. Being profitable, with high gross margins and strong growth, is part of what we believe gives us the permission to play in the Indian market," said Velamakanni. Kotak Capital, Morgan Stanley India, Axis Capital, and Goldman Sachs are the book running lead managers for the issue. The IPO will open for subscription on February 9 and close on February 11. "I think we need to set the benchmark for how a great AI company should perform, how it should be valued, and what should be its aspirations. After we establish ourselves well in the Indian stock market, I want to make sure that Fractal is in position to be the torch bearer for India's AI," said Velamakanni.

Fractal Analytics sets IPO price band, eyes Rs 14,450 crore valuation

Fractal Analytics has set a price band of 857-900 rupees per share for its IPO, targeting a valuation of approximately $1.60 billion. The AI firm will open its IPO for retail investors on February 9, aiming to become India's first pure-play AI-focused listed company. Indian enterprise artificial intelligence firm Fractal Analytics set a price band of 857-900 rupees ⁠per share for its initial public offering, targeting a valuation of about Rs 14,450 crore ($1.60 billion), according to Reuters calculations. Fractal will launch its IPO for retail investors on February 9, while anchor investors can bid on February 6, according to a newspaper advertisement on Wednesday, as the company positions itself to become the country's first pure-play AI-focused listed firm. Bidding will close on February 11. Fractal is set to list in a subdued domestic primary market this year. Only three companies launched mainboard IPOs in January, down from 10 in December, amid weak market conditions driven by trade and geopolitical uncertainties. However, investment bankers expect 2026 to be a milestone year for India's primary market, following two consecutive years of record fundraising. Fractal cut its issue size by over 40% to Rs 2,834 crore ahead of the offering. Founded in 2000, the Mumbai-based AI and analytics company counts some of the world's largest technology and consumer firms, including Microsoft, Apple, Nvidia , Alphabet, and ⁠Tesla, among ⁠its clients, the prospectus showed. IPO proceeds will be used to repay debt at its U.S. subsidiary, set up new offices in India and fund research and development, with a focus on generative artificial intelligence. Shares of Fractal will list on the Indian bourses on or about February 16. ($1 = 90.4270 Indian rupees) (Reporting by Komal Salecha and Meenakshi Maidas in Bengaluru; Editing by Eileen Soreng) (You can now subscribe to our ETMarkets WhatsApp channel)

India's first AI IPO: Fractal Analytics announces dates for Rs 2,834 crore public issue

Fractal Analytics announced dates for its Rs 2,834 crore IPO, billed as India's first pure-play AI listing. The issue includes fresh shares and an offer-for-sale, funding global expansion, AI products and acquisitions, amid improving profitability and rising investor interest globally. Fractal Analytics, one of India's best-known artificial intelligence firms, has announced the dates for its initial public offering, setting the stage for what is expected to be India's first pure-play AI IPO. The Rs 2,834 crore public issue will open for subscription on February 9 and close on February 11. The IPO comprises a fresh issue of shares worth Rs 1,023 crore and an offer-for-sale of Rs 1,810 crore by existing shareholders. Founded in 2000 by Srikanth Velamakanni and Pranay Agrawal, Fractal Analytics has built itself into a global AI and decision intelligence company over the past two decades. The company provides end-to-end analytics, artificial intelligence and data-driven decision-making solutions to large enterprises across sectors. Fractal's client base includes some of the world's largest technology and consumer companies such as Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta and Tesla. More than 65% of its revenue comes from customers in the United States, with operations spread across New York and Mumbai. The company plans to use the proceeds from the fresh issue to strengthen its global operations. This includes funding its US subsidiary, Fractal USA, for repayment or prepayment of borrowings, investing in laptops and infrastructure for employees, and expanding office space in India. A portion of the funds will also be used to scale up its AI and GenAI product pipeline and to pursue acquisitions as part of its inorganic growth strategy. Fractal is backed by marquee global investors including TPG, Apax Partners and Gaja Capital, and has raised over $800 million in funding to date. Over the years, the company has steadily expanded its AI software stack and research and development capabilities, positioning itself as a full-stack AI provider to industries such as consumer goods, retail, telecom, healthcare and financial services. Financially, the company has shown a sharp improvement in performance. For the year ended March 2025, Fractal reported revenue of Rs 2,765 crore, a growth of nearly 26% over the previous year. Profit after tax turned positive at Rs 22 crore, compared with a loss of Rs 5.47 crore in FY24, supported by better margins and operating leverage. EBITDA margin improved to 17.4% from 10.6% a year earlier. The IPO comes at a time when global investment in AI and digital infrastructure is accelerating. India is emerging as a key market, with large global technology firms committing billions of dollars to AI data centres and cloud infrastructure. Kotak Mahindra Capital, Morgan Stanley India, Axis Capital and Goldman Sachs (India) Securities are acting as book-running lead managers for the issue. With dates announced, Fractal's listing is expected to test public market appetite for AI-focused companies in India. (You can now subscribe to our ETMarkets WhatsApp channel)

India's Fractal Analytics eyes up to $1.6 billion IPO valuation, aims to be first AI-focused listed firm

Feb 4 (Reuters) - Indian enterprise artificial intelligence firm Fractal Analytics is targeting a valuation of up to 144.5 billion rupees ($1.60 billion) in what will be a scaled-down initial public offering. The IPO positions the company to become the country's first pure-play AI-focused firm to list on stock exchanges and potentially set the benchmark for the technology. Fractal's latest valuation is lower than what it was valued at in the previous financing round, and the company also cut its issue size by over 40%. The company was advised to leave money on the table as AI is a new category for investors, Fractal CEO Srikanth Velamakanni told Reuters on Wednesday. "Investors don't understand AI right now. [We were told to] make sure that you price your IPO attractively enough for all of us who are new to the category to come and invest and learn from it and grow from it," he said. The company, which has set a price band of 857-900 rupees per share for its IPO, will list on the Indian bourses on or about February 16. Existing shareholders have also reduced the number of shares on offer in the IPO, which Velamakanni said was because they didn't want to sell at the current price. Founded in 2000, the Mumbai-based AI and analytics company counts some of the world's largest technology and consumer firms such as Microsoft and Alphabet among its clients, according to its prospectus. It is set to list in a subdued domestic primary market this year. Only three companies launched mainboard IPOs in January, down from 10 in December, amid weak market conditions driven by trade and geopolitical uncertainties. Velamakanni brushed off uncertainty around tech spending, saying that those budgets are being reoriented towards AI. Fractal is looking to use a part of its IPO proceeds to acquire companies that have built a "defensible, licensable business" around AI products, and also companies with capabilities in life sciences, as it looks to build its expertise in the area, Velamakanni said. ($1 = 90.4270 Indian rupees) (Reporting by Haripriya Suresh, Komal Salecha and Meenakshi Maidas in Bengaluru; Editing by Eileen Soreng and Leroy Leo)