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Capillary Technologies India

• Capillary Technologies is coming out with a 100% book building; initial public offering (IPO) of 1,55,16,760 shares of 2 each in a price band Rs 549-577 per equity share. 
• Not more than 75% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 10% for the retail investors.
• The issue will open for subscription on November 14, 2025 and will close on November 18, 2025.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 2 and is priced 274.50 times of its face value on the lower side and 288.50 times on the higher side.
• Book running lead managers to the issue are JM Financial, IIFL Capital Services and Nomura Financial Advisory and Securities (India). 
• Compliance Officer for the issue is Gireddy Bhargavi Reddy.

Profile of the company

Capillary Technologies India is a software product company offering artificial intelligence (AI)-based cloud-native Software-as-a-Service (SaaS) products and solutions primarily to Enterprise Customers (defined as customers contributing more than Rs 4.00 million in revenue from operations in the six-month period ended September 30, 2025 and September 30, 2024 and Rs 8.00 million in revenue from operations in a Fiscal) globally to develop loyalty of their consumers and channel partners. As of September 2025, based on benchmarking with its peer group and the breadth of its offerings, it stands out as one of the global leaders in loyalty and engagement management.

The company is among one of the few players in the loyalty management space that offer end-to-end loyalty solutions. The company’s diversified product suite which includes its advanced loyalty management platform (Loyalty+), connected engagement platform (Engage+), predictive analytics platform (Insights+), rewards management platform (Rewards+) and customer data platform (CDP) allow its customers to run end-to-end loyalty programs, get a comprehensive view of consumers and offer unified, cross-channel strategies that deliver a real-time omni-channel, personalized, and consistent experience for consumers. Its solutions assist customers in generating engagement, drive conversions and boost repeat sales.

The company’s SaaS products enable its customers to build engaged relationship with their consumers, help them reward their consumers and offer them analysis and insights using its CDP. Leveraging its numerous application programming interfaces (APIs), its products integrate with its customers’ existing technology stack including their enterprise resource planning (ERP) systems, point of sale (POS) systems, e-commerce, social media platforms and multiple such consumer and transaction touch points in addition to seamlessly integrating with other third party data, marketing, and analytics platforms to provide extensibility of features for its customers. The scalability, architecture and security of its technology platforms allow for integration with other existing platforms such as security systems, identity verification, access management and data analytics.

Proceed is being used for:

• Funding its cloud infrastructure cost
• Investment in research, designing and development of its products and platform
• Investment in purchase of computer systems for its business
• Funding inorganic growth through unidentified acquisitions and general corporate purposes

Industry Overview

Software as a Service (SaaS) is a cloud-based delivery model that allows enterprises to access applications over the internet without requiring on-premises installations. Instead of purchasing and maintaining software on local servers, businesses subscribe to SaaS platforms, which are hosted and managed by third-party providers. Over the past decade, SaaS has become the default model for enterprise software across industries. The appeal is straightforward - lower upfront investment, faster deployment, regular updates, enhanced security, and minimal IT overhead. Businesses increasingly demand solutions that support distributed workforces, automate workflows, and scale with business growth.

Further, India has evolved from being a global delivery center to a hub for SaaS product innovation. What sets India apart is a combination of factors: a deep and affordable engineering talent pool, strong founder ambition, and increasing maturity in product design and global GTM strategies. Indian SaaS companies are building high-quality products at significantly lower operating costs, allowing them to serve global markets at competitive price points without compromising on quality and functionality. Indian SaaS players are increasingly adopting a “Built-for-the-World” approach, designing products from day one to serve global users across industries and geographies. These companies are prioritizing multi-tenant, API first platforms, building for scale, localization, and compliance from the outset. With lean, digital-first sales engines, they are able to acquire and support customers remotely, often without a large on-ground presence.

As the customer engagement and loyalty landscape matures, SaaS players are evolving beyond traditional models, embracing hybrid strategies that combine the scale of horizontal solutions with the depth of vertical specialization. This dual approach allows platforms to serve cross-industry loyalty needs while still offering deep, domain specific capabilities. alesforce, Atlassian, Slack, Comarch, and Capillary Technologies are strong examples of hybrid SaaS companies that combine the broad applicability of horizontal platforms with the depth of vertical solutions - offering core functionalities that scale across industries, while also providing tailored features and integrations to meet the specific needs of sectors like retail, healthcare, finance, and travel. Going forward, Hybrid SaaS platforms offer core functionalities -- such as campaign management, analytics, and omnichannel execution -- that are applicable across various industries. This horizontal scalability allows businesses to deploy solutions rapidly and cost-effectively. 

Pros and strengths

Trusted partner in loyalty solutions: As of September 2025, the company provides a comprehensive set of AI-led SaaS products for customer relationship management (CRM) and the loyalty management industry. With a decade-long track record, it has established itself as a leader in the global loyalty solutions industry in terms of email marketing tools, marketing automation platforms, loyalty solutions, rewards programs, account-based marketing tool (ABM), customer support tools, CDP, CRM and analytics / business intelligence tools. In its experience, the company creates exit barriers for customers by offering solutions that provide value and convenience. Its loyalty programs include instant rewards, personalized benefits, and robust security measures. These features make it difficult for customers to switch to competitors, as they would lose out on these incentives. This approach not only helps it to avoid losing its customers to competitors but also expands share of wallet by fostering deeper loyalty and ongoing engagement.

Comprehensive solutions for diverse segments: The company provides a full-spectrum loyalty management platform designed to address a wide range of use cases across industries. The company’s customers are offered a comprehensive view of each consumer along with their transactional and behavioral activity across channels through its underlying CDP. It helps its customers decipher real-time interactions of consumers by applying AI and ML capabilities.  Its solutions are adaptable and scalable and are used across a diverse range of industries including retail, financial services, travel, hospitality, healthcare and consumer packaged goods. Loyalty is different for different verticals. Its platform supports multiple use cases, enabling enterprises to integrate loyalty programs with their broader customer engagement strategies.

Scalable cloud-based infrastructure with seamless integration: The company’s technology infrastructure is built on a scalable, cloud-based architecture that allows its customers to process large volumes of data on a real-time basis and ensure speed and stable performance on a large scale to accommodate and support the increased complexity and diversity of their business operations. Its cloud platform is built to integrate seamlessly with the customer’s existing technology stack. It is able to integrate solutions offered by payments providers, marketing platform players, and analytics platforms with its platform. It amalgamates transactional systems that payment providers typically focus on with seamless workflow management, and AI-driven efficient data management and analytics.

Strong partnership network resulting in addition of new brands: The company has a successful track record of adding new brands through organic growth and strategic acquisitions. Its customer acquisition strategy is driven by a combination of direct sales efforts and an extensive partner network. The acquisition and integration of Persuade Group in Fiscal 2021 enabled it to enhance its capabilities and expand its reach in new verticals such as healthcare, with the notable entry of an American healthcare company that provides technology services, pharmacy care services and various direct healthcare services. Over the last three Fiscals, it has added multiple new customers including Masan Group Corporation, a Spanish multinational financial services company, a Canadian multinational banking and financial services corporation, a British multinational telecommunications company, is a retail and commercial bank in the United Kingdom, an Indian adhesives manufacturing company and an American healthcare company that provides technology services, pharmacy care services and various direct healthcare services.

Risks and concerns

Revenue dependency on limited clients: The company generated a significant portion of its revenues from a limited number of customers. Its top 5 and top 10 customers contributed to 38.60% and 55.70% of its revenue from operations in the six-month period ended September 30, 2025, and 43.35% and 58.71%, in Fiscal 2025, respectively. Any loss or reduction of business or termination of contracts from/by these customers could reduce its revenues and materially adversely affect its business, results of operations, financial condition, and cash flows.

High exposure to North American customers: The company has derived a significant portion of its revenue from customers located in North America. In the six-month period ended September 30, 2025 and September 30, 2024 and Fiscals 2025, 2024 and 2023 its revenue from the customers located in North America accounted for 56.01%, 57.20%, 56.59%, 48.09% and 20.00%, respectively, of its revenue from operations. Any adverse developments in North America could adversely affect its business, results of operations, cash flows and financial condition.

High exposure to select industry segments: A majority of the company’s revenues are dependent on a limited number of industry verticals. Customers in retail, healthcare, BFSI and telecommunications verticals contributed to 63.83%, 63.39%, 64.08%, 56.60% and 50.19% of its revenue from operations in six-month period ended September 30, 2025 and September 30, 2024 and Fiscals 2025, 2024 and 2023 respectively. Any decrease in demand for services in these industry verticals could reduce its revenues and materially adversely affect its business, results of operations, financial condition, and cash flows.

Sustained losses and future profitability risk: The company has incurred losses of Rs 68.22 million in the six-month period ended September 30, 2024 and Rs 593.78 million in Fiscal 2024 and Rs 877.19 million in Fiscal 2023 and certain of its Material Subsidiaries have also incurred losses in the past and it may experience losses in the future which could result in an adverse effect on its business, cash flows and financial condition.

Outlook

Capillary Technologies India is a leading Indian software-as-a-service (SaaS) company that specializes in customer loyalty and engagement solutions. The company has comprehensive solutions (Loyalty+, Insights+, Engage+, Rewards+) for Diverse Segments. The company has multiple loyalty program and coalitions for retailers and conglomerates. On the concern side, the company generated a significant portion of its revenues from a limited number of customers and any loss or reduction of business or termination of contracts from/by these customers could reduce its revenues and materially adversely affect its business, results of operations, financial condition, and cash flows. Moreover, the company has derived a significant portion of its revenue from customers located in North America and any adverse developments in North America could adversely affect its business, results of operations, cash flows and financial condition.

The issue has been offering 1,55,16,760 shares in a price band of Rs 549-577 per equity share. The aggregate size of the offer is around Rs 851.87 crore to Rs 895.32 crore based on lower and upper price band respectively. Minimum application is to be made for 25 shares and in multiples thereon, thereafter. On performance front, the company’s revenue from operations, increased by 13.93% from Rs 5,251.00 million in Fiscal 2024 to Rs 5,982.59 million in Fiscal 2025 primarily on account of an increase in retainership and other services. Moreover, restated profit for the year was Rs 132.80 million in Fiscal 2025 as compared to a restated loss for the year of Rs 593.78 million in Fiscal 2024.

Working with partners helps it to get entry into large enterprises that are focused on digital transformation. A dedicated team is focused on building relationships with potential partners to gain access to their customer base. It is also strengthening relationships with industry analysts to increase pipeline visibility and improve New ACV contribution. Additionally, in Fiscal 2025, it has established one customer advisory board for India and Middle East and are building two more customer advisory boards to cater to South-east Asia and US/UK customers. These customer advisory boards comprise a group of selected customers who provide strategic insights and feedback to help shape its products and services. This board helps it to ensure that its solutions align with customer needs and industry trends. Members of the advisory board share their experiences, challenges, and suggestions, enabling it to continuously improve and innovate its offerings.