Fractal Analytics IPO Day 3 Highlights: Issue booked 2.66x as QIBs step in — GMP turns negative

QIB – 4.18x

NII – 1.06x

Retail – 1.03x

Employee – 0.61x

Total – 2.66x

As of September 2025, Fractal’s top ten clients had an average relationship tenure of over eight years, with marquee clients including Citibank, Costco, Franklin Templeton, Mars, Mondelez, Nationwide, Nestlé, and Philips.

Fractal Analytics IPO is - ₹2. This means that shares of Fractal Analytics are trading ₹2 below the IPO price of ₹900.

The company operates through two business segments: Fractal.ai, which delivers AI services and products primarily through its proprietary agentic AI platform, Cogentiq, and Fractal Alpha, which houses independent AI ventures targeting core clients, adjacent markets, and new geographies.

Fractal Analytics IPO's NII segment was also fully subscribed as of 4 pm on the final day of bidding. QIB was the most booked segment at 4x bids.

Fractal Analytics has a strong presence across its four focus industries and serves large global clients, with the top 10 clients averaging over eight years of engagement. At the upper price band of ₹900, the issue is valued at 78.9x FY25 P/E (post-issue), there are no listed companies in India or globally for comparison for similar business model , with positive sector outlook with moderate growth—18% revenue CAGR during FY23–25 and 20% YoY growth in 1HFY26.

Attrition remains elevated at 16.3% in FY25 and 15.7% in 1HFY26. also Fractal is India’s first pure-play AI company to list, positioned as a Decision Intelligence player combining AI services with incubated SaaS products (Fractal Alpha ).

We assign a Subscribe rating for Long Term high-risk growth focused investor. ( 3–5 year horizon)

Fractal’s portfolio includes proprietary platforms and models such as Cogentiq (an agentic AI orchestration platform), Vaidya (a multimodal medical foundation model ecosystem), Kalaido.ai (a diffusion‑based generative image model), Pioneer (a multi‑agent system for software development and autonomous data science), and the Fathom family of reasoning and deep‑research models, alongside investments in ecosystem assets such as Qure.ai (AI for radiology) and Analytics Vidhya.

The global data, analytics and AI industry is undergoing a structural shift toward an AI-native, GenAI-led enterprise stack, with core AI services and platforms emerging as the fastest-growing layers of digital transformation spend.

Within this rapidly evolving landscape, Fractal Analytics is strategically positioned as a mission-critical, end-to-end enterprise AI partner, combining consulting, services, platforms and product businesses to help large global clients operationalize AI at scale across functions and industries.

It operates in a long-duration, secular growth market, with its total serviceable addressable market across AI services, platforms and software expected to expand from about US$85 billion in FY25 to around US$171 billion by FY30P, implying a robust mid-teens CAGR in line with, or above, broader DAAI growth.

This expansion is driven by accelerating GenAI adoption, rising demand for domain-specific AI, and the shift from pilot projects to scaled, production-grade AI and agentic systems embedded in core workflows, providing strong multi-year revenue visibility.

Fractal’s offerings are deeply integrated into client decision journeys and technology stacks, supported by high net revenue retention, long-standing relationships with marquee “must win” clients, and an increasing mix of recurring and product-linked revenues, resulting in high switching costs and improving earnings quality.

We recommend subscribing to the issue with a long-term investment horizon, as sustained execution on its IP- and platform-led strategy, deepening penetration within must-win clients, and powerful GenAI-led industry tailwinds could translate into meaningful value creation over time.

• Pure-Play AI Leader: Unlike traditional IT firms, Fractal is a specialized AI and decision intelligence provider, offering high-margin exposure to the global enterprise AI boom.
• Scalable SaaS Transition: The company is shifting from labour-intensive consulting to high-growth Agentic AI platforms (like Cogentiq), driving recurring revenue and better profit margins.
• Proven Financial Turnaround: Following a profitable FY25 ( ₹220.6 cr PAT), Fractal has demonstrated strong operating leverage, with revenue growing faster than expenses.
• High-Value Subsidiary Pipeline: Their "Alpha" incubator has produced market leaders like Qure.ai (Healthcare) and Asper.ai (Retail), providing a diversified portfolio of high-growth AI assets.
• High Client Stickiness: Boasts a 121.3% Net Revenue Retention and an NPS of 77, with top-tier Fortune 500 relationships averaging over 8 years.

(Source: Lakshmishree)

While the emergence of Artificial General Intelligence (AGI) poses a long-term disruptive risk to traditional AI business models, Fractal’s dominant position in the analytics niche suggest a strong competitive strength and deep-rooted client trust. As the company continues to capitalize on the global demand for enterprise-grade AI, its ability to maintain high margins and operational leverage, we recommend a ‘SUBSCRIBE’ rating for long-term investors, said Lakshmishree Investment.

Fractal, in its RHP, said that it has experience in serving several large enterprises, including the majority of the “magnificent seven” companies (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla).

Fractal Analytics IPO was subscribed 1.45 times as of 1.15 pm, thanks to massive QIB demand. Other segments, however, remained undersubscribed.

QIB quota was booked 2.27 times, QIB segment received 46% bids and the retail portion garnered 78% subscription.

Fractal Analytics operates in a niche segment of Data Analytics leveraging AI developed through in-house R&D and resources as well as on external models. It has a healthy presence across its 4 focus industries with top MNCs as its clients and an average tenure of 8+ years across the top 10 clients.

At the upper price band of ₹900, the issue is valued at FY25 P/E multiple of 78.9x based on post-issue capital. This looks elevated given the relatively modest revenue growth (18% revenue CAGR between FY23-25 and 20% YoY growth in 1HFY26). Attrition rate for the company continues to be elevated (16.3% in FY25/15.7% in 1HFY26). Risks such as insourcing by clients especially with the advent of AI tools could lead to loss of clients and impact the company’s business model.

Considering the elevated valuation, we assign a NEUTRAL rating to the issue and would like to track the performance of the company for a few quarters post listing.

The company works with marquee clients such as Citibank, Costco, Franklin Templeton, Mars, Mondelez, Nationwide, Nestle, Phillips, etc., ensuring participation across its focus industries of CPGR, TMT, HLS, and BFSI. As of Sep’25, the company served 122 Must Win Clients (MWCs)and served its top 10 clients by revenue in 1HFY26 for an average of more than eight years.

Fractal Analytics IPO was subscribed 54% so far as QIB investors ramped up buying, with their quota booked 55%.

Fractal Analytics IPO subscribed 28% as of 12 pm. The QIB segment was booked 8% and the NII portion was subscribed 38%. The retail portion garnered 73% bids and the employee segment 27%.

As of 1HFY26/FY25, the company’s top 10 clients contributed 54.2%/53.8% to the total revenue from the Fractal.ai business segment. Thus, failure to maintain and expand relationships with its existing client base or add new clients, may impact the company’s business and financial performance.

The issue is priced at a P/BV of 7.76 based on its NAV of Rs. 116 as of September 30, 2025 and asking price is at a P/E of ~109.12x if we attribute FY26 annualized earnings. There are no listed peers to compare with as per the RHP. The issue is very aggressively priced.

Fractal Analytics offers investors an opportunity to contribute in a rapidly growing sector of DAAI services and generative AI that serves high-end consumer brands in India and globally but, Looking at all the factors, risks, opportunities and Elevated valuation, Investors with High-risk appetite can apply for Long term horizon.

— Sushil Finance

Fractal Analytics IPO is a book build issue of ₹2,833.9 crore, consisting of a fresh issue of 1.1 crore shares, aggregating to ₹1,023.5 crore and an offer for sale of 2 crore shares aggregating to ₹1,810.4 crore. The company plans to use the fresh funds raised for the following:

1. Investment in Fractal USA for Debt Repayment – ₹264.9 crore

2. Purchase of Laptops – ₹57.1 crore

3. Setting-up New Office Premises in India – ₹1,211 crore

4. Investment in R&D and Sales & Marketing under Fractal Alpha – ₹355.1 crore

5. Inorganic Growth and General Corporate Purposes

Fractal Analytics IPO subscribed 22% as of 10.30 am. The QIB segment was booked 2% and the NII portion was subscribed 31%. The retail portion garnered 67% bids and the employee segment 23%.

Fractal is India’s first pure-play AI company to list, positioned as a Decision Intelligence player combining AI services with incubated SaaS products (Fractal Alpha). The company has seen a sharp turnaround, moving from a ₹55 crore loss in FY24 to a ₹221 crore profit in FY25 on the back of 26% revenue growth.

At the upper band of ₹900, valuations look expensive at ~79x (post) FY25 P/E, but this reflects a scarcity premium for a listed AI platform. Best suited for high-risk, growth-focused investors with a 3–5 year view looking to ride the global GenAI cycle.

— Views by Swastika

Fractal has built a diversified revenue profile. In FY25, revenue from the Fractal.ai segment stood at ₹2,703.7 Cr, with CPGR contributing ₹1,061.5 Cr, TMT ₹808.7 Cr, HLS ₹374.5 Cr, BFSI ₹298.0 Cr, and other industries ₹161.0 Cr.

Revenue from operations grew from ₹1,985.4 Cr in FY23 to ₹2,196.3 Cr in FY24, and further to ₹2,765.4 Cr in FY25, reflecting a 25.9% YoY growth. For the six months ended September 30, 2025, revenue stood at ₹1,559.0 Cr, up 19.9% YoY.

Profitability improved materially in FY25. EBITDA increased to ₹398.0 Cr, with an EBITDA margin of 14.4%, compared to ₹97.2 Cr and 4.4% in FY24. Adjusted EBITDA stood at ₹482.1 Cr, with an adjusted EBITDA margin of 17.4%.

Profit after tax (PAT) for FY25 was ₹220.6 Cr, compared to a loss of ₹54.7 Cr in FY24, with a PAT margin of 8.0%, while adjusted PAT stood at ₹347.8 Cr, translating into an adjusted PAT margin of 12.6%.

Fractal Analytics IPO opened for the final day of bidding today at 10 am. Investors can place their bids till 5 pm today. Issue was booked 20% as of the second day.

Investors can apply for the IPO in multiples of 16 shares, requring a minimum investment of ₹14,400.

Fractal Analytics IPO grey market premium (GMP) has slumped to ₹7 today. This means that shares of Fractal Analytics IPO are trading at ₹907 as against the offer price of ₹900.

At the current levels, Fractal Analytics IPO listing pop could be less than 1% only.

The company is scheduled to list on the stock exchanges on February 16.

Fractal Analytics IPO received bids for 36,40,320 shares against 1,85,79,360 shares on offer, according to NSE data, resulting in 20% bids.

The category for retail individual investors (RIIs) fetched 60 per cent subscription, while the quota for non-institutional investors subscribed 27 per cent. The portion for qualified institutional buyers (QIBs) received a 2 per cent subscription.