The ₹1,789 crore Amagi Media Labs IPO entered its second day of bidding with modest improvement in market sentiment, as reflected by an uptick in grey market premium and selective investor participation across different categories.

Grey Market Premium Shows Marginal Improvement

The grey market premium for Amagi Media Labs has increased to approximately 6%, translating to roughly ₹20 over the issue price of ₹361. This represents an improvement from the earlier 4% premium, suggesting marginally enhanced investor expectations despite prevailing market volatility and heightened scrutiny of new-age technology companies.

Subscription Status Reveals Mixed Investor Response

By the close of Day 1, the IPO demonstrated selective demand patterns across different investor categories. The overall subscription stood at 6%, with bids received for 17.48 lakh shares against the total offering of 2.72 crore shares.

Retail investors displayed comparatively stronger interest, while institutional participation remained notably restrained, with QIBs placing no bids for their reserved portion.

IPO Structure and Timeline

The public offering comprises a fresh issue of ₹816 crore and an offer-for-sale of ₹972.62 crore by existing shareholders. The IPO remains open for subscription until January 16, 2026, with a price band set between ₹343 and ₹361 per share.

Financial Performance and Fund Utilization

Amagi operates in the connected TV and programmatic advertising sector, serving advertisers and publishers across streaming platforms with a strong global presence, particularly in the US market. The company has demonstrated consistent revenue growth and improving profitability metrics.

The company plans to allocate ₹550.06 crore from the IPO proceeds toward strengthening technology capabilities and cloud infrastructure, while remaining funds will support inorganic growth opportunities and general corporate requirements.

Market Outlook and Investment Considerations

Brokerages monitoring the offering suggest a cautious approach, recommending investors view the IPO through a medium to long-term perspective rather than focusing on short-term listing gains. Anand Rathi highlighted Amagi's positioning in the connected TV ecosystem and expanding global footprint as differentiating factors, while noting valuation comfort and market conditions as near-term variables affecting performance expectations.

Amagi Media Labs, a Bengaluru-headquartered software-as-a-service provider in streaming and content monetisation, has announced plans for an initial public offering to raise funds for expansion and cloud infrastructure development. The company serves global media companies across three key segments and has demonstrated strong revenue growth despite facing profitability challenges in recent years.

IPO Structure and Fund Utilisation

The company plans to raise capital through a dual approach, combining fresh equity issuance with existing shareholder exits.

The fresh issue proceeds will be directed toward cloud infrastructure development and inorganic growth opportunities. The offer for sale component will provide existing investors with partial exit opportunities while reducing promoter holdings.

Business Operations and Client Portfolio

Amagi Media Labs operates across three primary business verticals in the streaming technology ecosystem. The company focuses on cloud modernisation services, helping legacy television network stations transition to cloud-based systems. Its streaming unification services assist content providers in navigating fragmented over-the-top distribution landscapes.

The monetisation segment enhances revenue generation through advertising solutions and expanded content distribution capabilities. The company maintains relationships with prominent global clients including Fox, Network18, and Lionsgate for content provision. Distribution partnerships include Rakuten and Roku, while advertising distribution involves collaborations with OnCore and The Trade Desk.

Geographic Revenue Distribution

The company demonstrates strong international presence with significant revenue concentration in developed markets.

Financial Performance and Profitability Turnaround

Amagi Media Labs has demonstrated consistent revenue growth while achieving a significant profitability milestone in recent periods. Revenue from operations increased by 30.7% annually, reaching ₹1,162.60 crore in FY25 from earlier levels in FY23.

The company achieved profitability in the first six months of FY26, reporting net profit of ₹6.50 crore after reducing losses from ₹321.00 crore in FY23 to ₹69.00 crore in FY25. EBITDA margin improved significantly to 8.3% in H1 FY26 compared to 2.0% in FY25, following EBITDA losses in previous years.

Research and Development Focus

The company maintains substantial investment in platform development, with research and development costs comprising approximately 24% of total expenses. This allocation aligns with global technology product companies' spending patterns and reflects the company's commitment to innovation in the rapidly evolving streaming technology sector.

Valuation Metrics

Given the company's recent transition to profitability, traditional price-earnings multiples are not applicable for historical periods. The price-sales multiple, calculated using annualised net sales for H1 FY26 and post-IPO equity structure, works out to 5.5 times. The Indian market lacks direct listed peers for comparative valuation analysis.