Fractal Analytics IPO explained in simple terms. Learn about the company’s business model, revenue sources, growth plans, key risks, and financial strengths. A clear guide to help investors understand whether the Fractal Analytics IPO is worth considering before investing.
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What does Fractal Analytics do, and why does it matter
Fractal Analytics is a data analytics and artificial intelligence company that helps large businesses make better decisions using data. It works with banks, consumer brands, healthcare companies, and other enterprises and builds models that can predict customer behaviour, detect risk, and improve operations. The company earns almost all its money by providing analytical services and AI-led solutions to enterprises across the world. In simple words, Fractal Analytics is a technology partner that sits behind big brands and helps their management teams answer questions such as which customers to target, what price to set, how much stock to keep, or how to spot fraud earlier. This idea matters because more companies now want to use data and AI in daily decision-making. If Fractal continues to execute well and keep its large clients happy, it can benefit from this long-term trend toward data-driven decisions.
Key Fractal Analytics IPO details
Here are the main points retail investors should know about the Fractal Analytics IPO, based on information from market platforms and the issue documents:
- IPO dates: The issue is scheduled to open for subscription on 9 February 2026 and close on 11 February 2026.
- Price band: The price band is from ₹857 to ₹900 per share, with a face value of ₹1 per share.
- Issue size:e The total issue size is about ₹2,833.9 crore. Of this, around ₹1,023.4 crore is a fresh issue of new shares, while about ₹1,810.5 crore is an offer for sale by existing shareholders.
- Lot size and minimum investment: Retail investors have to apply for at least one lot of 16 shares. At the lower end of the price band, one lot costs about ₹13,712, and at the upper end it costs about ₹14,400.
- Listing: The shares are proposed to list on both the National Stock Exchange and the Bombay Stock Exchange.
The fresh issue money will go to the company for its growth plans, while the offer for sale part will go to existing investors who are selling part of their stake.
Company background, founders, and ownership
Fractal Analytics was founded in 2000 in Mumbai by a team that included Srikanth Velamakanni and Pranay Agrawal, along with three other co-founders. Over time, the company moved part of its base to the United States and now operates with a global presence and dual focus on India and international markets. The founders come from finance, engineering, and analytics backgrounds and started the company at a time when the software as a service model and advanced data analytics were still very new in India. Over more than two decades, Fractal has evolved from solving basic data queries for banks to building full-scale AI solutions and products for large enterprises. Fractal has attracted well-known global private equity investors. Funds backed by TPG and Apax are important shareholders and are offering part of their stake in the IPO. The company reached unicorn status in 2022 and was recently valued at about 2.4 billion dollars before the IPO process.
Financial performance at a glance
As per its draft prospectus and later financial disclosures, Fractal has shown strong revenue growth and has recently returned to profitability. For the financial year ending March 2025, revenue from operations grew to about ₹2,765 crore, up from about ₹2,196 crore in the previous year. This is a growth of around 26 percent. Nearly all of this revenue came from analytical services, with a small but fast-growing contribution from subscription income. The company reported a net profit of about ₹221 crore in FY 2025, compared with a loss of around ₹55 crore in FY 2024. Total expenses grew more slowly than revenue, which helped margins improve. Employee costs are the largest expense, at about ₹2,005 crore in FY 2025, reflecting the people-intensive nature of the business. Fractal also has a healthy balance sheet. It reported current assets of about ₹1,625 crore, including around ₹288 crore in cash and bank balances in FY 2025, which offers some comfort on liquidity. Overall return on capital employed and operating margins have been in the low to mid-teens, which is reasonable for a growing technology services company.
Strengths and competitive position
Fractal’s biggest strength is its long-standing relationship with large global clients. The company’s net revenue retention in its main segment stood at more than 121 percent in FY 2025. This means that existing clients, on average, spent more with Fractal compared with the previous year, after adjusting for any clients that left. The top ten clients contributed about 54 percent of segment revenue and have been with Fractal for an average of more than eight years. This suggests deep integration and trust with these customers. Many of its clients are large global firms, including Fortune 500 companies, which can offer stable and repeat business if the company continues to execute well. Another strength is Fractal’s early move into AI and analytics. It has built a portfolio of products and platforms, as well as services, and has incubated spin-off ventures like healthcare AI firm Qure AI and decision intelligence tools under brands such as Cuddle. It has also partnered with global technology leaders, including a tie-up with OpenAI, to help enterprises adopt advanced AI models. Geographically, the company earns about 65 percent of its revenue from the United States, around 17 percent from Europe, and about 8 percent from India, with the rest from other regions. This gives it access to large overseas markets where technology spending is high.
Key risks and concerns for investors
While the story sounds attractive, retail investors should be aware of several risks. First, client concentration is high. A small set of large customers contributes more than half of the revenue. If even one or two important clients reduce spending or switch to competitors, growth and profitability could be affected.
Second, dependence on the United States market is significant. Around two-thirds of revenue comes from that region. Any slowdown in technology budgets, regulatory changes, or economic weakness there can directly hit Fractal’s business. Currency movements between the rupee and the dollar can also impact reported numbers.
Third, this is a people-heavy business. Employee costs are almost four-fifths of total expenses. To grow, the company must keep hiring and retaining skilled data scientists and engineers, often at rising salary levels. High attrition or wage inflation can pressure margins.
Fourth, competition is strong. Fractal faces rivals from global IT services companies, specialised analytics firms, and new-age AI startups, including those that use large language models and automated tools. If AI capabilities become more commoditised or clients build more of these solutions in-house, pricing power could weaken.
Finally, a large part of this IPO is an offer for sale by existing investors, including private equity funds. While this is common, it also means a big share of the money raised will not go into the company but into the pockets of current shareholders. Retail investors should look closely at the valuation relative to earnings and growth, and not just at the growth story.
Who should consider investing, and who should be cautious
The Fractal Analytics IPO may interest investors who
- Understand technology and analytics businesses and are comfortable with the ups and downs of this sector.
- Have a medium to long-term view, for example, five years or more, and are willing to ride out short-term volatility.
- Want exposure to an India-born but global AI and analytics company that already works with large international clients.
On the other hand, investors should be cautious if they
- Are very conservative and prefer stable cash flow businesses like utilities or simple consumer companies.
- Have a short time horizon or may need the money within one or two years.
- Are not comfortable analysing valuation for technology companies where future growth expectations play a big role in pricing.
For beginners, it may help to limit exposure to a small part of the overall portfolio, if they decide to apply at all. It is also sensible to compare Fractal’s valuation and growth metrics with those of other listed IT and analytics companies before making a decision.
Conclusion
Overall, the Fractal Analytics IPO presents a mix of promise and caution for investors. The company operates in a fast-growing area of data analytics and AI, has long relationships with large global clients, and has shown a strong recovery in profitability. Its exposure to the US market and focus on high-value enterprise customers can support steady growth if demand for data-driven decision-making continues to rise.
At the same time, investors should not ignore the risks. Revenue depends heavily on a small group of clients, employee costs are high, and competition in AI and analytics is intense. The large offer for sale also means limited fresh capital is going into the business. In the end, this IPO may suit investors with a long-term view who understand technology businesses and can handle volatility. Conservative investors or short-term traders should approach with care and focus closely on valuation before investing.
Source: Fractal Analytics IPO & Fractal Analytics IPO Details
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