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Mumbai: The Indian capital markets are set to welcome their first pure-play Artificial Intelligence (AI) enterprise, as Fractal Analytics has officially secured approval from the Securities and Exchange Board of India (SEBI) to launch its Initial Public Offering (IPO). This major development, confirmed by the issuance of the observation letter on November 18, greenlights the TPG and Apax Partners-backed firm to proceed with its plan to raise approximately ₹4,900 crore within the next twelve months.
Fractal Analytics, a global provider of AI and analytics solutions, is positioning itself as a leader in a rapidly accelerating global AI market. Market reports indicate that the company is aiming for a valuation of over $3 billion upon listing, signaling strong confidence in India’s homegrown deep-tech ecosystem.
💰 IPO Structure: Fresh Funds for Growth, Partial Exit for Investors
The proposed public issue is strategically divided into a fresh issuance of equity shares to raise growth capital and a large Offer-for-Sale (OFS) component, providing liquidity to its marquee private equity backers.
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Total Issue Size: Up to ₹4,900 crore.
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Fresh Issue: ₹1,279.3 crore. This amount will go directly to the company. The company also has the option to conduct a pre-IPO placement of up to ₹255.8 crore, which would subsequently reduce the size of the fresh issue.
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Offer-for-Sale (OFS): ₹3,620.7 crore. This component allows four major shareholders—Quinag Bidco (Apax Partners affiliate), TPG Fett Holdings (TPG Group affiliate), GLM Family Trust, and individual promoters—to partially divest their stakes.
The structure of the OFS highlights the stake held by these financial giants. TPG Fett Holdings is the largest shareholder pre-issue with a 25.67% stake, followed by Quinag Bidco (18.78%) and GLM Family Trust (15.7%).
🚀 Fueling the AI Engine: Utilization of Fresh Proceeds
The funds raised from the fresh issue are strategically earmarked to accelerate Fractal’s global and domestic growth, particularly in its high-potential AI ventures:
| Purpose | Allocation (₹ Crores) | Strategic Goal |
| Repayment of subsidiary borrowings (Fractal USA) | 264.9 | Strengthen financial balance sheet and optimize capital structure. |
| R&D and Sales & Marketing (Fractal Alpha) | 355.1 | Boost innovation in its strategic AI business segment, focusing on next-gen AI products and Generative AI. |
| Setting up new India office premises | 121.1 | Expand domestic infrastructure to support a growing global workforce. |
| Purchase of laptops for employees | 57.1 | Enhance operational capacity and employee productivity. |
| Inorganic Growth & General Corporate Purposes | Remainder | Fund strategic acquisitions globally to expand capability and market reach. |
Fractal’s business operates under two main segments: Fractal.ai, which houses core AI services and products like the Cogentiq platform, and Fractal Alpha, which acts as an incubator for independent AI businesses and R&D. The heavy investment in R&D and Fractal Alpha demonstrates a commitment to long-term technological leadership.
📈 Strong Financial Momentum and Global Clientele
Founded in 2000 by Srikanth Velamakanni and Pranay Agrawal, Fractal has cultivated deep, long-term relationships with marquee global enterprises. The client roster includes major names like Citibank, Costco, Franklin Templeton, Mars, Mondelez, Nationwide, Nestle, and Philips, illustrating its positioning as a strategic AI partner for Fortune 500 companies.
Financially, the company has shown a sharp trajectory reversal, reporting substantial gains in the last financial year:
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Revenue from Operations (FY25): ₹2,765.4 crore, marking a strong 25.9% increase from ₹2,196.3 crore in the previous year.
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Profitability (FY25): The company achieved a Net Profit of ₹223 crore, successfully swinging back from a loss of ₹49.9 crore in the prior fiscal year.
This profitable growth, combined with high client stickiness (Net Revenue Retention often reported above 120%), positions the company well to attract public market investors.
The IPO will be managed by a consortium of high-profile investment banks: Kotak Mahindra Capital Company, Morgan Stanley India Company, Axis Capital, and Goldman Sachs (India) Securities.
#FractalAnalytics #IPO #SEBIGoAhead #ArtificialIntelligence #AI #TechIPO #CapitalMarkets #TPG #ApaxPartners #EnterpriseAI #DigitalIndia #Rs4900CrIPO #StockMarket #VentureCapital
