Fractal Analytics IPO Day 3: Issue subscribed 2.66x. Check GMP, key dates, more. Apply or avoid?

The initial public offering of Fractal Analytics, a provider of AI solutions, has seen a lackluster response from investors for the second day in a row, with a subscription rate of 20% recorded on Tuesday, February 11.

The Fractal Analytics IPO subscription opened on Monday, February 9, and will close on Wednesday, February 11. Fractal Analytics IPO price band has been set between ₹857 and ₹900 per equity share, with a face value of Re 1. The minimum lot size for the Fractal Analytics IPO is 16 equity shares, and investors can apply for additional shares in multiples of 16 thereafter.

The public issue has allocated 75% of the shares for qualified institutional buyers (QIB), up to 15% for non-institutional investors (NII), and no more than 10% is set aside for retail investors. Shares amounting to ₹600 million have been designated for employees.

The Fractal Analytics IPO allotment is likely to be finalised on Thursday, February 12, with the company planning to initiate refund processes on Friday, February 13. Shares will be credited to the demat accounts of successful applicants on the same day that refunds are processed. Fractal Analytics shares are expected to be listed on the BSE and NSE on Monday, February 16.

Fractal Analytics, founded in March 2000, is an international firm focused on enterprise AI and analytics, assisting major organizations in enhancing their decision-making capabilities. With more than 20 years of experience, the company develops AI solutions by merging its extensive technical expertise with specialized insights across different domains and functions.

Fractal Analytics IPO GMP today

Fractal Analytics IPO GMP or grey market premium is ₹7. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Fractal Analytics share price was indicated at ₹907 apiece, which is 0.78% higher than the IPO price of ₹900.

According to the grey market activities observed over the past nine sessions, today's IPO GMP is trending downward and is anticipated to fall further. The minimum GMP recorded is ₹7.00, whereas the maximum GMP stands at ₹180, as per expert analysis.

Fractal Analytics IPO subscription status

Fractal Analytics IPO subscription status was 2.66x on day 3. The retail portion is subscribed 1.03x, and NII portion was booked 1.06x and Qualified Institutional Buyers (QIBs) portion received 4.18x bids.

The company has received bids for 4,94,79,888 shares against 1,85,79,360 shares on offer, at 19:00 IST, according to data on BSE.

Fractal Analytics IPO review

As per GEPL Capital, based on the earnings forecast for FY25, the pricing of the issue reflects a P/E ratio of 79x in relation to the company's paid-up capital. The brokerage asserts that the company stands out as India's premier pure play AI firm, boasting notable clients, enhancing financial results, and possessing robust technical and functional expertise. Thus, they advise a "Subscribe" rating for the issue.

As per BP Equities, at the peak of the price range of ₹900 per share, the company is valued at a P/E ratio of 110.0x based on its projected FY26 annual earnings. Considering the company's strategic position in a swiftly growing AI market and its enhancing profitability, the brokerage has assigned a "SUBSCRIBE" rating to the offering from a medium to long-term viewpoint.

Fractal Analytics IPO details

The offering, with a total value of ₹2,834 crore, will include a fresh issue of shares amounting to ₹1,023.5 crore, as well as an Offer For Sale (OFS) component valued at ₹1,810.4 crore. The company plans to allocate a portion of the IPO proceeds to help its subsidiary pay off some of its existing debts. Additionally, a share of the funds raised will be devoted to purchasing laptops, acquiring new office space, and investing in research and development, sales and marketing, along with several undisclosed acquisitions.

Kotak Capital, Morgan Stanley India, Axis Capital, and Goldman Sachs are serving as the Book Running Lead Managers for the offering, while MUFG Intime India Pvt. Ltd. will function as the registrar.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.