Around 35% of proceeds will fund AI R&D and alpha-related investments, while the rest will support loan repayment and capex. The issue has drawn strong domestic and global interest, including mutual funds, insurance companies, and marquee institutional investors. Photo Credit: Dado Ruvic
Fractal Analytics Ltd, India’s first pure-play artificial intelligence company, opens its initial public offering today at a price band of Rs 857-900, with an issue size of Rs 2,834 crore. Bids can be placed for a minimum of 16 equity shares of face value of Rs. 1 each, and in multiples of 16 thereafter.
While up to 75 per cent of the IPO is reserved for qualified institutional buyers, retail investors can bid up to 10 per cent, and non-institutions can bid up to 15 per cent.
The IPO comprises a fresh issue (Rs 1,023.5 crore) and an offer for sale (Rs 1,810.4 crore). In the OFS, Quinag Bidco Ltd, managed by Apax Partners, will sell shares worth ₹880.9 crore, while TPG Fett Holdings and GLM Family Trust will each sell shares worth ₹450 crore.
Earlier, the company was targeting Rs. 4,900 crore through the IPO, but reduced it to Rs. Rs 2,834 crore.
About Rs. ₹355 crore, or 35 per cent of the capital raised from this IPO, is earmarked for AI revenue, R&D, and alpha-related investments. According to Velamakanni, AI revenue and R&D are crucial for Fractal’s future success as it is an evolving space and “only the most innovative companies willing to invest in AI, R&D have a strong chance of success. The rest of the IPO proceeds will be used for loan repayment and some basic capex.
Fractal Analytics Ltd has raised ₹1,248.26 crore from anchor investors ahead of its proposed initial public offering, allotting 1.387 crore shares at the upper end of the price band of ₹900 per share, the company said.
The anchor book attracted 52 investors, reflecting strong demand from domestic and global institutions. Of the total shares allotted, about 52.8 lakh crore shares, or 38.05 per cent, were allocated to 11 domestic mutual funds across 22 schemes. Key participants included SBI Mutual Fund, ICICI Prudential Mutual Fund, Motilal Oswal Mutual Fund, UTI Mutual Fund, Bandhan Mutual Fund and Invesco Mutual Fund.
Insurance companies such as Life Insurance Corporation of India, HDFC Life Insurance, SBI Life Insurance, Bharti AXA Life Insurance, and Edelweiss Life Insurance also participated in the anchor round.
Global interest was robust, with investments from marquee long-only and institutional investors, including Morgan Stanley Investment Funds, Ashoka WhiteOak Emerging Markets Funds, Jupiter Global Fund, Goldman Sachs Bank Europe and Société Générale.
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, and Gaja, Fractal is a leading pure-play data and artificial intelligence company with domain expertise spanning consumer packaged goods & retail; technology, media, and telecom; healthcare and life sciences; and banking, financial services, and insurance.
Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited, Axis Capital Limited, and Goldman Sachs (India) Securities Private Limited are the Book Running Lead Managers (“BRLMs”) to the Offer.
SBI Securities view
Fractal Analytics operates in a niche segment of Data Analytics, leveraging AI developed through in-house R&D and resources, as well as on external models. It has a healthy presence across its 4 focus industries, with top MNCs as clients, and an average tenure of 8+ years with the top 10 clients. At the upper price band of Rs 900, the issue is valued at a FY25 P/E multiple of 78.9x based on post-issue capital. This looks elevated given the relatively modest revenue growth (18% revenue CAGR between FY23-25 and 20% YoY growth in 1HFY26). The company’s attrition rate continues to be elevated (16.3% in FY25/15.7% in 1HFY26). Risks, such as clients’ insourcing, especially with the advent of AI tools, could lead to client losses and impact the company’s business model. Given the elevated valuation, we assign a NEUTRAL rating to the issue and would like to track the company’s performance over a few quarters post-listing.
Published on February 9, 2026