Fractal Analytics IPO Explained: Business, Numbers, Valuation, Risks & More

Fractal Analytics is an AI company that helps big global firms turn messy data into clear, usable decisions. Its IPO runs from 9 to 11 Feb 2026 at a ₹857-₹900 price band, and the latest GMP (grey market premium, an unofficial market indicator that can change fast) is about ₹29; treat it only as market chatter, not a guarantee. In this blog, I’ll break down how Fractal really earns money, where the IPO funds will go, what the key numbers say about its turnaround, and the biggest strengths, risks, peer signals, and valuation comfort, so you can decide calmly, not emotionally.

IPO Overview

• IPO Date: 9 to 11 Feb, 2026
• Total Issue Size: ₹1,907.3 Cr
• Price Band: ₹857 to ₹900 per share
• Minimum Investment: ₹14,400
• Lot Size: 16 Shares
• Tentative Allotment Date: Feb 12, 2025
• Listing Date: Feb 16, 2025 (Tentative)
• GMP: The GMP for the Fractal Analytics IPO is ₹29, reflecting a 3.22% gain over the issue price, according to Chittorgarh.com.

Disclaimer: GMP is an unofficial indicator and is subject to market volatility.

How Fractal Makes Money

• Custom problem-solving for giants (Fractal.ai): A large bank or FMCG company comes with a tough question like “How do we reduce customer churn (people leaving)?” and Fractal builds a made-to-fit solution using AI + engineering + design, and charges project or service fees.
• Repeatable products when problems repeat (Fractal Alpha): When many clients face the same issue, Fractal builds a ready product (like a subscription software) or incubates a focused AI business (example: Asper.ai for demand prediction), then earns subscription or licensing revenue.
• It starts from the decision, not the spreadsheet: Fractal’s method begins with “What choice does the user need to make today?” then they clean data, build AI models, and finally design the tool so people actually use it at work.
• It sells to ‘Must Win Clients’ (MWCs): These are very large companies Fractal targets and keeps; as of Sep 2025, it served 122 MWCs, which can make revenue steadier because big clients usually sign longer, larger deals.

Objectives of the IPO

• Repay part of a subsidiary loan: About ₹264.9 crore is planned to repay a term loan at subsidiary Fractal USA, which can reduce interest burden and give more breathing room in cash flows.​
• Spend more on building and selling new AI bets: Around ₹355.1 crore is earmarked for R&D (building new tech) and sales or marketing, mainly for the Fractal Alpha segment, to push more products and “product-like” revenue.
• Open four new offices in India: About ₹121.1 crore is planned for new leased offices in Bengaluru, Gurugram, Pune, and Noida, basically to add capacity for teams as the business scales.
• Buy laptops for delivery capacity: Around ₹57.1 crore is planned to buy ~2,904 laptops in FY27 and ~3,444 laptops in FY28, which sounds basic, but in a people-led tech business, employee productivity tools are real operating capex.

Strengths:

• Big turnaround and better operating health: FY25 revenue from operations rose to ₹2,765.4 crore (+25.9% YoY) and profit turned ₹220.6 crore vs a ₹54.7 crore loss in FY24; adjusted EBITDA margin improved to 17.4%.
• Sticky customers and strong satisfaction: Net Revenue Retention is at 114%, and an NPS around 76 (“would you recommend us?” score) suggests clients not only stay but expand, which supports growth quality.
• Innovation engine is real, not just marketing: R&D spend was ₹143.6 crore (5.2% of operating revenue) in FY25, and it had 28 registered patents, which can help differentiate in a crowded AI services market.

Risks:

• High client concentration: In the Fractal.ai segment, the top 10 clients contributed 54.2% of revenue in the six months ended Sep 2025, so if 1 or 2 big clients cut budgets, growth and profits can fall quickly.
• People costs are huge and attrition is meaningful: Employee benefits were 72.2% of revenue in the six months ended Sep 2025, and attrition was 15.7% (about 16 of every 100 employees left in a year), which can raise delivery risk and hiring costs.
• Geography dependence (US-heavy): The United States contributed 64.9% of revenue in the six months ended Sep 2025, so a US slowdown, tech spending cuts, or stricter AI/data rules can hit demand more than investors may expect.

For detailed information, visit Fractal’s official IPO page at INDmoney.

IPO Valuation

At the IPO price, the price-to-earnings (how many rupees investors pay for ₹1 of yearly profit) based on FY25 profit is about 67.37x, while considering the annualized H1 FY26 profits, the P/E stands at 109.1x. The RHP also notes Nifty 50 P/E ~22.35 on 3 Feb 2026, which tells you this IPO is priced at a premium to the broad market. In simple words, you are paying a higher price today because investors expect Fractal’s future profits to grow faster than average companies, but if execution slips (client concentration, hiring pressure, US slowdown), a high P/E leaves less safety cushion.

Who’s Making Money from the IPO?

This IPO has an Offer for Sale (OFS) of ₹1,810.4 crore, meaning this money goes to existing shareholders (not to Fractal for growth). Quinag Bidco Ltd is selling shares worth ₹880.9 crore and is locking 5.2x on its ₹173 per share average cost, while TPG Fett Holdings is cashing out ₹450 crore for ~1.4x return. GLM Family Trust is also selling ₹450 crore, but a return multiple isn’t meaningful because its cost is shown as nil. Satya Kumari Remala and Rao Venkateswara Remala are selling shares amounting to ₹29.5 crore, translating to 450x on their ₹2 per share entry price.

Analyst View

Fractal looks like a rare “India-listed enterprise AI” story, and that scarcity can pull attention in a cautious IPO market, especially because it serves large global clients and has shown a sharp FY25 profit turnaround. At the same time, the pricing implies the market already expects a lot: the IPO valuation is in a premium zone, so future execution (keeping big clients, controlling talent costs, and sustaining growth outside the US concentration) matters more than usual.

​If you are a well-informed investor, a practical way to think about it is: the IPO may see first-mover interest, but the real wealth creation case depends on whether Fractal can keep improving margins while scaling Fractal Alpha products, not just growing services headcount.

For a seamless application process, visit the INDmoney IPO page.

Disclaimer

Source: Fractal's RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.