Enterprise artificial intelligence (AI) solutions provider Fractal Analytics has filed the draft red herring prospectus (DRHP) with SEBI to raise up to Rs 4,900 crore through an initial public offering (IPO). The move puts the company on track to become the first listed AI company in India.
IPO structure and objectives
The public issue will comprise a fresh issue of shares worth Rs 1,279 crore and an offer for sale of Rs 3,621 crore by existing shareholders, including TPG Fett Holdings (Rs 2,000 crore), Apax Partners-owned Quinag Bidco (Rs 1,463 crore), and other investors.
The IPO will be conducted through the book-building process, with 75% being reserved for qualified institutional buyers, 15% for non-institutional investors, and 10% for retail individual investors. The company has also reserved up to 5% for eligible employees.
The company may consider a pre-IPO placement of up to Rs 256 crore before filing the red herring prospectus, subject to regulatory approvals and market conditions.
Fractal plans to utilise the net proceeds from the fresh issue for investment in its US subsidiary for debt repayment, setting up new office premises in India, R&D investments, sales and marketing under Fractal Alpha, and funding it inorganic growth.
Financial performance and market presence
Kotak Mahindra Capital, Morgan Stanley India, Axis Capital and Goldman Sachs (India) Securities are the book running lead managers for the issue.
The Mumbai-headquartered company clocked a 25.9% year-on-year rise in revenue from operations to Rs 2,765 crore for FY25. It reported a profit after tax of Rs 220 crore for the fiscal.
Fractal generates 66% of its revenues from the Americas, 17.7% from Europe and the rest from the Asia-Pacific region.
Fractal offers its AI solutions under the Fractal.ai umbrella, which includes its flagship agentic AI platform Cogentiq and Fractal Alpha, consisting of independent AI businesses targeting core clients and broader markets.
According to Tracxn data, Fractal has raised around $857 million through six funding rounds. In July this year, it raised $172 million via a secondary share sale, valuing the company at $2.44 billion.
According to the DRHP, TPG Fett is the largest external stakeholder with a 25.67% holding, followed by Quinag Bidco (18.78%) and GLM Family Trust (15.7%).