Fractal Analytics IPO
IPO Price Range: Not Announced Yet
Objectives of IPO
- The company’s IPO aims to raise a total offer size of up to ₹4,900 crore. This total offering is structured into a fresh issue aggregating up to ₹1,279.3 crore, and an offer for sale (OFS) aggregating up to ₹3,620.7 crore. Key selling shareholders participating in the OFS include Quinag Bidco Ltd (up to ₹1,462.6 crore), TPG Fett Holdings Pte. Ltd. (up to ₹1,999.6 crore), Satya Kumari Remala and Rao Venkateswara Remala (up to ₹29.5 crore), and GLM Family Trust (up to ₹129.0 crore).
- Out of the total fresh issue, the company plans to utilize ₹264.9 crore to invest in its wholly-owned subsidiary, Fractal USA, for the repayment of its borrowings. This debt includes a term loan that Fractal USA availed, which had an outstanding amount of ₹264.9 crore targeted for this object) as of July 31, 2025. Repaying this loan will help reduce debt servicing costs and potentially improve the company’s consolidated debt-to-equity ratio. The company's total consolidated borrowings were ₹266.2 crore as of March 31, 2025.
- The company intends to allocate ₹57.1 crore towards capital expenditure for the purchase of laptops to support its ongoing business operations.
- An estimated amount of ₹121.1 crore is set aside for establishing new offices on a leasehold basis in India. These new premises are planned for Bengaluru, Gurugram, Pune, and Noida.
- The company proposes to invest ₹355.1 crore to enhance R&D and sales and marketing efforts within its Fractal Alpha segment. For context, the company’s total R&D investments were ₹143.6 crore (5.2% of revenue) and sales and marketing expenses were ₹28.1 crore (1%) in FY25.
- A portion of the IPO funds is reserved for funding unidentified acquisitions, other strategic initiatives, and general corporate purposes, which include working capital, employee expenses, and meeting ongoing business requirements.
Financial Performance of Fractal Analytics
The company achieved robust top-line expansion, with total Income rising from ₹2,043.7 crore in FY23 to ₹2,816.2 crore in FY25, demonstrating a CAGR of 17.4%. This growth accelerated significantly in FY25, where total income grew by 25.6%. This jump was driven by a 25.9% increase in revenue from operations, attributed to expansion with existing clients (Net Revenue Retention of 121.3% in FY25) and higher pricing for AI solutions. Correspondingly, total assets grew steadily by 12.7% CAGR, reaching ₹2,857.6 crore by the end of FY25.
Profitability showed extreme volatility. The profit/loss swung from a gain of ₹194.4 crore in FY23 to a loss of ₹54.7 crore in FY24, before reversing to a strong profit of ₹220.6 crore in FY25. The high FY23 profit was primarily due to a substantial exceptional gain of ₹523.9 crore, which resulted from the gain on loss of control of its associate, Qure.ai. The return to an 8% net profit margin in FY25 was further strengthened by a deferred tax credit of ₹38.3 crore, arising from amendments to capital gains tax rates in the Finance Act 2024.
Operational efficiency improved consistently across the period, reflected by the adjusted EBITDA margin climbing from 6.8% in FY23 to 17.4% in FY25. This operational improvement resulted partly from tight cost management, as employee benefits expense decreased from 81% of revenue in FY23 to 72.5% in FY25. Total borrowings showed a decline of 9.6% CAGR, moving from ₹325.6 crore in FY23 to ₹266.2 crore in FY25, primarily due to debt repayment and refinancing activities.
Strengths and Risks
Strengths
It is India’s leading pure-play enterprise AI company. Its revenue from operations grew at a Compound Annual Growth Rate (CAGR) of 18% over FY23-FY25, significantly exceeding the global Data, Analytics, and AI (DAAI) market CAGR of 11%.
The company focuses on "Must Win Clients" (MWCs), serving 113 MWCs in FY25. This focus results in high customer loyalty, demonstrated by a Net Revenue Retention (NRR) rate of 121.3% in FY25 for the Fractal.ai segment.
Its commitment to being client-centric is reflected in a high Net Promoter Score (NPS) of 77 in FY25 (and 77 in FY24 and 73 in FY23). Furthermore, its top ten clients (contributing 53.8% of Fractal.ai revenue in FY25) have an average relationship tenure of over eight years.
It has a global clientele, with 91.6% of its FY25 revenue originating from outside India. The United States alone contributed ₹1,798.8 crore, representing 65.2% of its total revenue from operations in FY25.
The adjusted EBITDA margin for the overall group improved significantly from 6.8% in FY23 to 17.4% in FY25. Its core Fractal.ai segment also saw its adjusted segment results margin climb from 10.7% to 18.8% over the same period.
The company generated robust net cash flow from operating activities of ₹397 crore in FY25, which marks a significant turnaround and improvement from ₹159.5 crore in FY24 and a loss of ₹30.6 crore in FY23.
Risks
It has a high dependence on a limited number of clients; the top-10 clients accounted for 53.8% of the Fractal.ai segment revenue in FY25. Losing even one client that contributed 9.8% of the total FY25 revenue could severely impact its results.
Although the group recorded a profit of ₹220.6 crore in FY25, it incurred a net loss of ₹54.7 crore in FY24. Furthermore, several Subsidiaries, including Fractal Analytics Inc., USA, have incurred losses in the past three fiscals.
Deriving 65.2% of revenue from the United States exposes the company to risks such as exchange rate volatility, especially between the Indian Rupee and the US Dollar. Its FY24 net loss of ₹54.7 crore was partly influenced by a substantial decrease in foreign exchange gain to ₹6.5 crore in FY24, down from ₹30.6 crore in FY23.
The success of the business depends on attracting and retaining highly skilled AI talent. This is challenging in the DAAI market, which faces competition from new entrants and increasing internal insourcing by clients, which may reduce enterprise spending on third-party providers.
The rapid changes in technology, particularly the evolution of Generative AI (Gen AI) and the potential development of Artificial General Intelligence (AGI), pose a risk of rapidly rendering its current AI solutions obsolete, which could negatively affect its long-term profitability.
How to Apply for Fractal Analytics IPO on INDmoney
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- View key details like price band, lot size, and dates.
- Tap Apply Now and choose your number of lots.
- Use INDpay UPI for instant mandate tracking.
- Your funds will be blocked until the share allotment is finalized.
Fractal Analytics Shareholding Pattern
| Promoters | 18% | |
| Name | Role | Stakeholding |
| Srikanth Velamakanni | Promoter | 5.21% |
| Pranay Agrawal | Promoter | 4.87% |
| Chetana Kumar | Promoter | 3.89% |
| Narendra Kumar Agrawal | Promoter | 3.54% |
| Rupa Krishnan Agrawal | Promoter | 0.49% |
| Public | 82% | |
| Name | Role | Stakeholding |
| TPG Fett Holdings Pte. Ltd. | Public | 25.67% |
| Quinag Bidco Ltd | Public | 18.78% |
| GLM Family Trust | Public | 15.7% |
| Relativity Resilience Fund I | Public | 1.03% |
| Others | 20.82% |
About Fractal Analytics
The company focuses its services on "Must Win Clients" (MWCs), which are major global enterprises defined by having over $10 billion in annual revenue or more than 30 million end-customers. In FY25, it served 113 MWCs. Its client base shows deep industry penetration, including working with 10 of the 20 largest CPG (consumer packaged goods) companies and 10 of the 20 largest HLS (healthcare and life sciences) companies in FY25. Geographically, the company maintains extensive global operations, deriving 91.6% of its FY25 revenue from clients outside of India. Its primary market is the Americas, particularly the United States, which contributed 65.2% of its total revenue in FY25. To execute its services, the company employed a total of 5,254 full-time staff as of March 31, 2025, and operated from 27 offices across 19 cities globally.
The company generates value by applying its "Fractal Approach," which is based on integrating AI, engineering, and design (AED) capabilities. This approach is "user-centric" and "decision-backwards," meaning it first identifies the specific human decision a client needs to make before designing the necessary AI solution. Its future strategic direction is focused on continually expanding and deepening relationships with its MWC clients. To stay ahead, it intends to increase investment in AI research and product innovation, aiming to advance the frontier of AI toward artificial general intelligence (AGI) by developing sophisticated reasoning models and agentic systems. It also plans to accelerate its capabilities by funding inorganic growth through selective strategic acquisitions.
For more details, visit here: https://fractal.ai
Frequently Asked Questions of Fractal Analytics IPO
Can we invest in Fractal Analytics IPO?
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Who are the promoters of Fractal Analytics?
The company's promoters are Srikanth Velamakanni, Pranay Agrawal, Chetana Kumar, Narendra Kumar Agrawal, and Rupa Krishnan Agrawal. As of the filing date, they collectively hold 18% of the pre-IPO equity share capital on a fully diluted basis.
Who are the competitors of Fractal Analytics?
The company competes with three segments: diversified IT service providers (like Accenture), product-focused companies (like C3.ai), and pure-play DAAI service providers (like LatentView and Tiger Analytics). However, no listed companies globally have a similar business model for direct financial comparison.
How does Fractal Analytics make money?
Fractal Analytics earns revenue from operations primarily by providing AI solutions (services and products) through its Fractal.ai segment and incubated Fractal Alpha AI businesses. In FY25, it generated ₹2,765.4 crore in revenue from operations.