IPO Note : Fractal Analytics Ltd by Geojit Investments Ltd
Fractal Analytics Ltd (Fractal), established in 2000 and headquartered in Mumbai, is recognized as India’s first dedicated enterprise AI and advanced analytics company with a strong global footprint across the US, Europe, and Asia. The company works with leading Fortune 500 clients including Microsoft, Apple, and Amazon. Its operations are divided into two key segments: Fractal.ai, which provides services and products through its platform Cogentiq, and Fractal Alpha, which brings together a portfolio of AI-driven businesses to address diverse client requirements across industries and functions.
* The global DAAI (Data Analytics & AI) market is projected to grow from US$143 billion in 2025 to US$310 billion by 2030 at a 16.7% CAGR, driven by Gen AI adoption across BFSI, healthcare, retail, CPG, and TMT sectors.
* The company maintains a diversified base of marquee clients, serving 113 Must Win Clients** in FY25, and has sustained relationships with its top 10 revenue-contributing clients for over eight years, underscoring stability and deep engagement across key industries.
* Fractal delivered steady topline growth, with revenue rising from Rs 1,985cr in FY23 to Rs 2,765cr in FY25 at an 18% CAGR, driven by strong demand for enterprise AI solutions and deeper engagement with global Fortune 500 clients.
* EBITDA margin improved to 12.7% in FY25 from 3.3% in FY24, reflecting better cost control and operating leverage.
* After incurring a PAT loss in FY24, the company achieved a strong turnaround in FY25 with a net profit of 220.6cr, reflecting resilience and improved operating leverage. ? The total debt stood at Rs 423cr in H1FY26 (D/E at 0.2x), and upon utilisation of net proceeds from the IPO for debt repayment (~Rs 265cr), the debt-to-equity ratio will trim down to 0.1x.
* At the upper price band of Rs 900, Fractal is valued at a P/E of 70x for FY25 and a P/E of 109x(annualised) for FY26E, reflecting an expensive valuation. However, Fractal Analytics offers a compelling investment opportunity in India’s enterprise AI ecosystem, supported by a strong global client base, improving profitability, and exposure to a rapidly growing sector. Hence, we recommend a ‘Subscribe’ rating for high-risk investors with a long-term investment horizon.
Purpose of IPO The IPO consists of a fresh issue of Rs 1,024cr and an OFS (offer for sale) of Rs 1,810cr, totalling Rs 2,834cr. The net proceeds from IPO will be utilised for debt repayment, purchase of laptops, setting up of new-office premises in India, R&D, funding for inorganic growth, acquisitions and general corporate purposes. The selling share holders are Quinag Bidco Ltd ,TPG Fett Holdings Pte Ltd ,GLM Family Trust and Satya Kumari Remala & Rao Venkateswara Remala.
Key Risks
• High customer concentration poses a risk, as ~54% of Fractal.ai’s revenue in H1FY26 depends on its top 10 clients, making the business vulnerable to any loss or reduction in these key relationships.
• Over 65% of revenue in H1FY26 comes from the USA, exposing the business to geographical concentration risk.
For More Geojit Financial Services Ltd Disclaimer https://www.geojit.com/disclaimer
SEBI Registration Number: INH20000034
