India's First AI Unicorn Fractal Analytics Files for $560 Million IPO

India's First AI Unicorn Fractal Files for $560 Million IPO

Fractal Analytics, a provider of artificial intelligence and analytics services, filed for an initial public offering in Mumbai that could value the company at more than $3.5 billion. Proceeds from the IPO could reach about 49 billion rupees (or about $560 million), according to its listing document published Tuesday. The company plans to sell fresh shares worth 12.79 billion rupees while backers including TPG Inc. and Apax Partners and two prominent angel investors intend to sell 36.21 billion rupees of stock.

Fractal Analytics files DRHP targeting Rs 4,900 crore IPO - The Economic Times

Fractal Analytics has filed its draft red herring prospectus with Sebi for a Rs 4,900 crore IPO, targeting a December listing on NSE and BSE. As India's first AI firm to go public, it reported Rs 2,765.4 crore revenue in FY25. Major shareholders Apax and TPG will offload shares worth Rs 3,461 crore.Fractal Analytics has filed its draft red herring prospectus with the Securities and Exchanges Board of India (Sebi) on August 12 with the IPO target of Rs 4,900 crore. Of this, Rs 1279.3 crore will be fresh issue of shares and offer for sale will be Rs 3620.7 crore. The company aims to list in the NSE and BSE by December, according to sources aware of the development. After consumer and fintech startups that are eyeing an IPO in 2025, India will see the listing of the first AI company with Fractal Analytics amid the technological shift the country is witnessing. InMobi, which now has a huge AI focus, is planning its IPO as well and is in the process of redomiciling to India. Capillary Technologies had filed its IPO papers in June 2025. As of July 31, 4,960 Fractal employees were ESOP holders. With the company going for IPO, it is likely to mint over 100 millionaires as well. The company has registered Rs 2765.4 crore in revenue for FY25, up 25.9% from FY24 when the company registered Rs 2196.3 crore revenue. The company generated profit of Rs 220.6 crore in FY25, as opposed to loss of Rs 54.7 crore in FY24. Offloading shares Its existing shareholders, Apax (Quinag Bidco) and TPG will be selling shares worth Rs 1462 crore and Rs 1999 crore respectively. Two of its angel investors, Gulu Mirchandani's GLM Family Trust and Rao Remala will be selling a small portion of their shares, accounting for about Rs 129 crore and Rs 29 crore respectively, according to the DRHP. Founders Srikanth Velamakanni and Pranay Agarwal and their family, collectively hold 20% in the firm, and employees, 17% through the ESOP programme. The company is currently valued at $2.4 billion, after its recent $172 million fund raise through secondary sales last month. It became a unicorn in 2022, when it raised $360 million from TPG Capital Asia. The company has raised a total of $855 million. The company works with Fortune 500 firms to make better decisions using analytics. It recently partnered with OpenAI to help customers adopt AI by offering custom model solutions, and AI agents. The US is the largest customer base, accounting for about 65% of its revenue, and Europe at 16%.

India's first AI unicorn Fractal files for $560 million IPO

Fractal Analytics, India's first AI unicorn, has filed for an IPO in Mumbai, potentially valuing the company at over $3.5 billion. The IPO aims to raise approximately $560 million, with existing investors selling a significant portion of their shares. Fractal intends to capitalize on the growing investor interest in AI and India's increasing adoption of consumer technologies. Fractal Analytics, a provider of artificial intelligence and analytics services, filed for an initial public offering in Mumbai that could value the company at more than $3.5 billion. Proceeds from the IPO could reach about 49 billion rupees (or about $560 million), according to its listing document published Tuesday. The company plans to sell fresh shares worth 12.79 billion rupees while backers including TPG Inc. and Apax Partners and two prominent angel investors intend to sell 36.21 billion rupees of stock. Fractal, India's first AI unicorn, is seeking to capitalize on investor demand for the red-hot sector as well as the country's adoption of consumer technologies. India's IPO market is set for a strong rebound after a slow start for the year, with up to $18 billion expected to be raised in the second half of 2025, according to Jefferies Financial Group. Co-founded in 2000 by five graduates of the Indian Institute of Management Ahmedabad, the startup's valuation topped $1 billion in 2022. Three of the founders have since exited, leaving Group Chief Executive Officer Srikanth Velamakanni and Fractal CEO Pranay Agrawal at the helm. The men, who each own about 10% of the company, aren't selling shares in the IPO. Fractal, whose global customer base includes Citigroup Inc., Royal Philips NV and Nestle SA, offers AI products and services to help enterprises improve operational efficiency, design new products, and build sustainable supply chains. It has partnered with OpenAI, using its models to build generative AI solutions. Fractal, which is dual-headquartered in Mumbai and New York, reported revenue of 27.65 billion rupees for the year ending March 2025, up 25.9% from the previous 12 months. It earned a profit of 220 million rupees. The company has submitted bids to develop an indigenous health-care large language model as well as a large reasoning model under the IndiaAI Mission, a government initiative to help develop homegrown AI technologies. Kotak Mahindra Bank, Morgan Stanley, Axis Capital and Goldman Sachs Group Inc. are the arrangers for the IPO.

Fractal Analytics Seeks Rs 4,900 Cr in IPO Filing with SEBI

Fractal Analytics Limited has filed its Draft Red Herring Prospectus (DRHP) dated August 12, 2025, with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) aggregating up to Rs 4,900 crore. The offer comprises a fresh issue of equity shares aggregating up to Rs 1,279.3 crore and an offer for sale of equity shares aggregating up to Rs 3,620.7 crore by existing shareholders, including Quinag Bidco Ltd, TPG Fett Holdings Pte. Ltd., Satya Kumari Remala and Rao Venkateswara Remala, and the GLM Family Trust. The company proposes to list its equity shares on BSE Limited and the National Stock Exchange of India Limited. Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited, Axis Capital Limited, and Goldman Sachs (India) Securities Private Limited are acting as the book-running lead managers to the offer, while MUFG Intime India Private Limited is the registrar to the offer. Founded in 2000, Fractal Analytics Limited develops artificial intelligence and analytics solutions and provides engineering and design services to help businesses analyse data, improve decision-making, and enhance operations. Fractal Analytics will allocate the proceeds from its fresh issue across debt repayment, infrastructure, tech investments, and growth initiatives. The company intends to invest Rs 264.9 crore in its wholly owned subsidiary, Fractal USA, to prepay or repay a $32 million term loan. It will spend Rs 57.1 crore on laptops and Rs 121.1 crore to establish new office premises in India. The company earmarks Rs 355.1 crore to boost research and development, sales, and marketing under its "Fractal Alpha" programme. Fractal designed Fractal Alpha as a brand to consolidate and scale its independent artificial intelligence businesses. Fractal sets aside the remainder for potential acquisitions or strategic initiatives and general corporate purposes, each capped at 25% of gross proceeds and together limited to 35%. Should a pre-IPO placement of up to Rs 255.8 crore materialise, it will reduce the fresh issue size. Proceeds from the Offer for Sale will flow entirely to the selling shareholders. Fractal Analytics reported Rs 2,050.67 crore in operations revenue in FY25, up from Rs 1,758.79 crore in FY24 and Rs 1,441.27 crore in FY23. Total income stood at Rs 2,088.08 crore in FY25, compared to Rs 1,785.59 crore in FY24 and Rs 1,452.66 crore in FY23. The company posted a profit after tax of Rs 175.04 crore in FY25, up from Rs 108.96 crore in FY24, marking a year-on-year increase of around 60.7%. In FY23, profit after tax was Rs 76.54 crore. Fractal's EBITDA reached Rs 341.27 crore in FY25, compared to Rs 256.65 crore in FY24 and Rs 207.61 crore in FY23. The company's EBITDA margin improved to 16.65% in FY25, from 14.59% in FY24 and 14.41% in FY23. As of March 31, 2025, the company's net worth stood at Rs 1,517.38 crore, with total borrowings of Rs 391.08 crore. Fractal derived 26.86% of its revenue from operations in FY25 from its top five customers and 38.39% from its top 10 customers. The loss of any of these customers, or a material reduction in the services they purchase, could adversely affect its financial results. The company's reliance on a concentrated customer base increases its exposure to changes in client priorities, budgets, or procurement policies. Many of Fractal's customer contracts allow termination without cause and require the company to compete for renewal through bidding processes. This structure limits revenue visibility and exposes the company to competitive threats during each renewal cycle. Fractal earned 69.21% of its FY25 revenue from operations from customers in the United States. Adverse economic, political, or regulatory changes in the US could materially affect its revenue and operations. Changes in immigration laws or visa restrictions could also disrupt the company's ability to deploy staff for client projects in that market. With a substantial portion of revenue denominated in foreign currencies, especially the US dollar, Fractal Analytics is exposed to currency fluctuations. The DRHP states that a 1% change in exchange rates would have impacted profit after tax in FY25 by Rs 13.85 crore. While the company uses hedging to mitigate this risk, such measures may not fully offset adverse movements. Fractal operates in a highly competitive analytics and AI market, facing competition from global consulting firms, specialised analytics providers, and technology companies. Competitors with greater financial, technical, and marketing resources may be able to offer lower prices, broader services, or more advanced solutions, which could reduce Fractal's market share and profitability. The company's success depends on retaining its senior management team, including its co-founders, and attracting and retaining skilled professionals. Inability to secure such talent, or loss of key personnel, could impair Fractal's delivery capability and strategic execution. Fractal processes sensitive data for clients across multiple jurisdictions. Any breach of its IT systems or failure to comply with data privacy laws could result in legal penalties, contractual liabilities, and reputational damage. Compliance with diverse and evolving regulations increases operational complexity and costs. Fractal pursues acquisitions as part of its growth strategy. Acquired businesses may be difficult to integrate, not perform as expected, or divert management attention from core operations. Failure to achieve anticipated synergies could reduce profitability and slow growth. The company designs and deploys AI models for clients and acknowledges that these AI systems can produce biased or unintended outcomes. Such outcomes could damage its reputation, result in client dissatisfaction, or trigger legal and regulatory challenges. Evolving regulatory frameworks for AI may impose additional compliance costs and operational requirements. Fractal Analytics relies on continuous access to its IT infrastructure and third-party cloud platforms for service delivery. System outages, cyberattacks, or inadequate disaster recovery planning could disrupt operations, delay projects, and harm client relationships. The company also identified other risks in its DRHP, including reliance on certain suppliers, potential changes in tax laws, the impact of financial market volatility on share value, the need to protect intellectual property, competition for acquisition targets, and the possibility of shareholder dilution through future equity issuances.