“Fractal Analytics has filed its Draft Red Herring Prospectus (DRHP) with SEBI. The company aims to raise ₹4,900 crore through its IPO, making it the first AI-focused unicorn in India to pursue a stock market listing.”
The IPO comprises a fresh issue of ₹1,279 crore and an offer-for-sale of ₹3,621 crore by existing shareholders. This landmark offering could value the company at over $3.5 billion, reflecting strong global investor appetite for AI businesses.
Strong Financial Performance Drives Growth
Fractal Analytics reported revenue of ₹2,765 crore in FY25, marking 25.9% year-over-year growth. The company achieved a remarkable turnaround with net profits of ₹221 crore, compared to a ₹55 crore loss in FY24.
EBITDA margins improved to 14.4% in FY25 from 4.4% in FY24. “Cash flow from operating activities was reported as ₹397 crore in FY25, not ₹3,970 crore.”
Global Client Base Powers Business Model
Founded in 2000 by Srikanth Vela Akanni and Pranay Agrawal, Fractal serves Fortune 500 companies across consumer goods, finance, healthcare, and technology sectors. The company works with marquee clients including Citi, Nestlé, Mars, Costco, and Franklin Templeton.
As of March 2025, Fractal has served 10 of the world’s 20 largest consumer packaged goods companies and 8 of the top 20 technology and telecom firms. This diversified client portfolio spans multiple geographies through dual headquarters in Mumbai and New York.
Strategic IPO Utilisation Targets Expansion
The company plans to deploy fresh issue proceeds of ₹1,279 crore across strategic growth initiatives. Key areas include investment in subsidiary Fractal USA, debt repayment, and expanding office infrastructure in India.
Significant allocations will fund research and development activities alongside sales and marketing for the ‘Fractal Alpha’ brand. The company also targets inorganic growth through acquisitions and strategic partnerships.
Why It Matters Now
“Fractal’s IPO highlights India’s growing participation in the global AI capital markets. The company has invested in AI and generative AI applications. Still, there is no official confirmation of any partnership with OpenAI in its DRHP filings. “positioning itself as a technological leader.
India’s IPO market remains vibrant in 2025, with robust pipelines in technology, healthcare, and green tech sectors attracting significant investor interest despite global economic uncertainties.
Strategic Advantage in a Growing Market
Fractal Analytics demonstrates a proven track record of innovation by identifying emerging AI trends and developing new solutions. The company has invested heavily in R&D and strategic acquisitions to expand capabilities.
“The firm engages in multiple AI initiatives, but there is no publicly available evidence confirming its direct participation in the India AI Mission. “This government involvement demonstrates commitment to innovation and regulatory compliance.
Risks and Considerations
Business leaders should consider several risk factors before making investment decisions. Rising insourcing trends by enterprises could reduce third-party provider spending, impacting revenue streams.
Talent retention challenges in rapidly evolving AI technologies pose operational risks. The company faces potential revenue erosion as generative AI automates complex processes through low-code tools.
Regulatory risks increase as countries worldwide introduce AI-related frameworks and privacy regulations. New market entrants with differentiated offerings could threaten Fractal’s competitive position in the fast-growing AI services market.
What Business Leaders Should Know
Founders remain significant shareholders and will not sell shares in the IPO, signalling confidence in long-term prospects. Kotak Mahindra Capital, Morgan Stanley India, Goldman Sachs India, and Axis Capital serve as book-running lead managers.
“The company’s proprietary AI platforms include Flyfish (generative AI for sales), Eugine (sustainability analytics), and Sense forth (conversational AI).”These solutions address specific enterprise needs across multiple industries.
Investors should evaluate final pricing and valuation metrics when announced. Established companies often leave limited upside for public investors, requiring careful analysis of fundamentals and corporate governance before making investment decisions.
