Fractal Analytics IPO booked nearly 3x: Key things to know before listing

Global enterprise AI and analytics firm Fractal Analytics' initial public offer (IPO) to raise up to Rs 2,834 crore -- through a mix of fresh equity and an offer for sale (OFS) -- concluded on Wednesday with an overall subscription of 2.7 times. Under the IPO, potential investors were able to bid for shares in a range of Rs 857-900 apiece in lots of 16 units.

Subscription update

By the end of a three-day bidding process, the IPO stood at an overall subscription of 2.7 times, with bids for 4.95 crore shares versus the total 1.86 crore shares on offer, according to provisional exchange data.

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Together with the IPO of Aye Finance, this marks the first mainboard IPOs in more than two weeks.

Here are 10 key things to know about Fractal Analytics:

Price band & lot size: Fractal Analytics shares were available for bidding between 10 am and 5 pm for three trading days, from February 9 to February 11.

The price band of Rs 857-900 translates to Rs 13,712-14,400 per lot. In other words, bidders had to shell out a sum of up to Rs 14,400 at a time to participate in the offer.

Fresh equity: The IPO included fresh equity worth up to Rs 1,023.5 crore, and the remaining portion by promoters and existing shareholders (OFS).

Listing date: The stock is set to be listed on main bourses BSE and NSE tentatively on February 16.

Company profile: As a global enterprise AI and analytics firm, Fractal crafts AI solutions by blending its deep technical know-how with domain and functional expertise. Its offerings are classified into two key segments: Fractal.ai (AI services and products) and Fractal Alpha (standalone AI businesses).

Financials: Here's a summary of the company's annual financial performance from FY23 to FY25:

Revenue, EBITDA and PAT numbers in crore rupees

Revenue mix:

Here's a breakup of the company's revenue sources, based on its FY25 earnings:

• Consumer Packaged Goods and Retail (CPGR): 39.2%
• Technology, Media, & Telecom (TMT): 29.9%
• Healthcare and Life Sciences (HLS): 13.8%
• Banking, Financial Services and Insurance (BFSI): 11%
• Others: 6%

Peer comparison:

No listed companies operate on a business model similar as Fractal's.

Key strengths:

• Debt-free company
• Big AI opportunity: AI & data analytics market growing fast globally
• End-to-end AI player: Offers consulting, tech, platforms and GenAI solutions
• Strong global clients: Works with top names like Citi, Nestlé, Costco, Philips
• Diversified industries: Presence across CPG, BFSI, TMT & healthcare segments
• Long track record: More thna 25 years of experience in analytics and AI
• Advanced AI skills: Strong in GenAI, NLP, computer vision and data engineering

Key weaknesses:

• Cybersecurity risk: Security breaches, hacking or data leaks can hurt operations, finances and reputation
• High client concentration: Top 10 clients contribute 54.2 per cent of revenue; single client at 8.2 per cent
• Industry concentration: Heavy exposure to CGR, TMT, HLS and BFSI
• US-centric revenue: 62-66 per cent revenue from the US
• Past losses: Losses in FY23 and FY24; profitability track record still evolving
• Global operations risk: Multi-geography execution increases costs, complexity and management bandwidth

Anchor investors:

Prior to the IPO, Fractal Analytics raised a sum of Rs 1,248 crore from anchor investors, including SBI Mutual Fund, Motilal Oswal Mutual Fund, LIC, HDFC Life Insurance, SBI Life Insurance, Goldman Sachs and Morgan Stanley.