AI firm Fractal Analytics slashes IPO size by 42% to Rs 2,834 crore

AI intelligence solutions provider Fractal Analytics has filed its red herring prospectus (RHP) with SEBI, scaling down its proposed IPO by about 42% from the size outlined in its draft papers last year.

According to the RHP, the public issue has been reduced to Rs 2,834 crore from the earlier proposed Rs 4,900 crore. The revised IPO will comprise a fresh issue of equity shares worth Rs 1,023.5 crore and an offer for sale (OFS) of Rs 1,810.4 crore by existing shareholders. Anchor bidding is scheduled to open on February 6, while the IPO will open for subscription on February 9 and close on February 11. The price band has not yet been announced.

Under the OFS, Quinag Bidco Ltd, an investment vehicle managed by Apax Partners, will account for 48.6% of the shares on offer, selling equity worth Rs 881 crore. TPG Fett Holdings Pte Ltd and the GLM Family Trust will each offload shares worth Rs 450 crore. Other selling shareholders include Satya Kumari Remala and Rao Venkateswara Remala.

Proceeds from the fresh issue will be used for a mix of growth and operational priorities. The company plans to deploy Rs 264.9 crore towards investing in its subsidiary Fractal USA for repayment of borrowings, Rs 121.1 crore for setting up new offices in India, and Rs 57.1 crore for the purchase of laptops. A further Rs 355.1 crore will be used to scale research and development and to market its Fractal Alpha platform. The remaining funds will be used for inorganic growth opportunities, investments in subsidiaries, working capital needs and general corporate purposes.

The issue allocation will reserve 75% of the net offer for qualified institutional buyers, 15% for non-institutional investors and 10% for retail individual investors. The basis of allotment is scheduled for February 12, with refunds and credit of shares to demat accounts expected on February 13. The shares are proposed to be listed on the BSE and NSE on February 16.

Founded in 2000 by Srikanth Velamakanni and Pranay Agrawal, Fractal serves large global enterprises across sectors such as consumer goods and retail, technology, media and telecom, healthcare and life sciences, and BFSI. Its client roster includes Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta and Tesla. As of September 2025, its offerings are organised under two segments: Fractal Alpha, which houses its AI businesses, and Fractal.ai, which includes AI services and products largely hosted on its Cogentiq platform.

On the shareholding front, TPG Fett Holdings Pte. Ltd. is the largest external shareholder with a 25.50% stake, followed by the GLM Family Trust at 15.60%.

For the financial year ended FY25, Fractal reported consolidated revenue of Rs 2,765 crore, up from Rs 2,196 crore in FY24. Net profit stood at Rs 220.6 crore in FY25, compared with a loss of Rs 54.7 crore in the previous year. In the first half of FY26, the company recorded revenue of Rs 1,559 crore and a profit of Rs 71 crore.

Axis Capital, Morgan Stanley India, Goldman Sachs India and Kotak Mahindra Capital Company are the book-running lead managers to the issue. MUFG Intime India has been appointed as the registrar.