India’s leading enterprise AI company aims for a $3 billion valuation, with fresh issue and OFS proceeds to fund expansion, R&D, and debt reduction
SEBI Clears Fractal Analytics’ IPO Proposal
Fractal Analytics, India’s first pure-play AI solutions provider, has received the green light from the Securities and Exchange Board of India (SEBI) to proceed with its much-anticipated ₹4,900 crore initial public offering (IPO).
- SEBI issued its observation letter on November 18, marking the final regulatory step before the IPO launch.
- The approval allows Fractal to float its IPO within the next 12 months.
The company had filed its Draft Red Herring Prospectus (DRHP) with SEBI in August 2025.
IPO Structure: Fresh Issue + Large OFS
The IPO will consist of:
- A fresh issue of ₹1,279.3 crore
- An offer-for-sale (OFS) of ₹3,620.7 crore by existing shareholders
Selling shareholders include:
- Quinag Bidco (Apax Partners)
- TPG Fett Holdings (TPG Group)
- GLM Family Trust
- Satya Kumari Remala and Rao Venkateswara Remala
Fractal may also raise up to ₹255.8 crore via a pre-IPO placement, which would reduce the size of the fresh issue accordingly.
Shareholding and Backers
Fractal is backed by top-tier global investors:
- TPG Fett Holdings – 25.67% (largest shareholder)
- Quinag Bidco (Apax Partners) – 18.78%
- GLM Family Trust – 15.7%
In July 2025, Apax Partners sold a 6% stake via a secondary share sale to a group of 22 institutional investors, including White Oak Capital, Gaja Capital, and Neo Asset Management, raising $172 million.
Use of IPO Proceeds
According to the DRHP, proceeds from the fresh issue will be used across multiple strategic and operational priorities:
| Use Case | Allocation (₹ crore) |
|---|---|
| Debt repayment (Fractal USA) | 264.9 |
| New laptops | 57.1 |
| New office premises (India) | 121.1 |
| R&D and Sales/Marketing (Fractal Alpha) | 355.1 |
| Inorganic growth and acquisitions | Undisclosed |
| General corporate purposes | Remainder |
Financials: Sharp Growth, Profitability Restored
Fractal’s financial performance shows significant improvement:
- FY25 profit: ₹223 crore (vs. loss of ₹49.9 crore in FY24)
- FY25 revenue: ₹2,765.4 crore (up 25.9% YoY from ₹2,196.3 crore)
The company’s turnaround strengthens investor confidence ahead of the IPO, especially amid global AI tailwinds.
Business Overview
Founded in 2000 by Srikanth Velamakanni and Pranay Agrawal, Fractal offers AI solutions under two key segments:
- Fractal.ai: AI services and products hosted on its Cogentiq platform
- Fractal Alpha: Focused on building AI-powered business verticals
Fractal serves global blue-chip clients, including:
- Citibank, Costco, Franklin Templeton, Mars, Nestlé, Nationwide, Philips, Mondelez
Key IPO Advisors
The IPO will be managed by a consortium of top investment banks:
- Kotak Mahindra Capital Company
- Morgan Stanley India Company
- Axis Capital
- Goldman Sachs (India) Securities
Fractal Analytics has secured SEBI approval to launch its ₹4,900 crore IPO. Backed by TPG and Apax Partners, the AI leader will use fresh funds for debt repayment, R&D, and growth. With strong FY25 earnings and a marquee client base, the IPO aims to tap India’s growing AI capital markets.
