Amagi Media Labs' maiden public offering opened to a lukewarm reception from investors on January 13, with the issue managing to garner only 6% subscription by the end of the first trading day. The cloud-native media technology company's IPO will remain open for bidding until January 16.

Subscription Details

The subscription pattern revealed varied investor interest across different categories. Retail investors showed the strongest participation, subscribing to 28% of their allocated portion. Non-institutional investors (NIIs) contributed modestly with 4% subscription, while the qualified institutional buyer (QIB) segment remained completely unsubscribed on the opening day.

Issue Structure and Pricing

Amagi Media Labs aims to raise ₹1,788.00 crore through this public offering, with shares priced in the band of ₹343-361 per share. At the upper price band, the company commands a valuation exceeding ₹7,800.00 crore.

The issue structure includes a fresh equity component of ₹816.00 crore and an offer for sale (OFS) worth ₹972.60 crore at the upper price band, involving 2.70 crore shares.

Fund Utilization and Selling Shareholders

From the fresh issue proceeds, ₹550.00 crore will be allocated toward strengthening Amagi's technology and cloud infrastructure, supporting inorganic growth through acquisitions, and meeting general corporate expenses. The OFS component involves several institutional and individual shareholders, including PI Opportunities Fund I and II, Norwest Venture Partners X–Mauritius, Accel India VI (Mauritius) Ltd, Trudy Holdings, and certain individual stakeholders.

Business Overview and Market Position

Amagi connects media companies with audiences through cloud-native technology solutions, facilitating video content delivery and monetization across smart TVs, smartphones, and digital platforms. The company operates through three core business segments: cloud modernization, streaming unification, and monetization and marketplace services.

Timeline and Grey Market Premium

The IPO allotment is scheduled for finalization on January 19, with shares expected to list on both BSE and NSE on January 21. Currently, Amagi Media Labs trades at a grey market premium of ₹17.00, suggesting a potential listing price of ₹378.00, representing a 4.71% premium over the upper price band.

Amagi Media Labs has launched its ₹1,800.00 crore initial public offering with management emphasizing that the company's recent profitability turnaround reflects fundamental business improvements rather than pre-listing financial adjustments. Co-founder and CEO Baskar Subramanian stressed that the improving financial performance stems from long-term investments and scale benefits inherent in the company's Software-as-a-Service model.

Financial Performance Transformation

The company has demonstrated significant financial improvement over recent years, with Subramanian highlighting sustained growth momentum. Amagi has maintained approximately 30.00% compound annual growth rate while achieving a dramatic operational turnaround. The most striking transformation has been in profitability metrics, where the company's adjusted EBITDA performance has shown substantial improvement.

Subramanian attributed this turnaround to operating leverage benefits from sustained investments in research and development and global sales initiatives over the past three years.

SaaS Model Driving Profitability

The CEO emphasized that Amagi's Software-as-a-Service business model serves as the foundation for the company's profitability improvements. The net revenue retention rate of 127.00% demonstrates strong customer expansion dynamics, with existing clients increasing their spending significantly year-over-year. Subramanian described this as equivalent to a same-store sales metric, explaining that for every ₹100.00 customers spent previously, they now spend ₹127.00 with Amagi.

This expansion within the existing customer base, combined with declining sales, research and development, and cloud costs as a percentage of revenue, supports management's confidence in continued margin expansion. The company operates what Subramanian characterized as a "classic land and expand business" model.

Future Profitability Projections

Looking ahead, Subramanian outlined ambitious but achievable profitability targets based on industry benchmarks. He suggested that a steady-state EBITDA margin of around 25.00% over the next two to three years represents a reasonable directional aspiration. This projection aligns with comparable global vertical software companies that operate at similar margin levels.

The CEO emphasized that Amagi remains in the early stages of capturing a large structural shift in the media industry. With less than 10.00% of the global market having moved to cloud-based solutions, approximately 90.00% of the market requires transformation over the coming decade. Currently serving more than 450 customers against a potential market of over 10,000, Amagi sees substantial opportunities for both new client acquisition and expanded offerings within its existing customer base.

Strategic Capital Allocation

Regarding the use of IPO proceeds, Subramanian confirmed that a portion will support inorganic growth initiatives. The company positions itself as a "glass-to-glass" media company offering comprehensive end-to-end capabilities, competing primarily against legacy hardware vendors. The acquisition strategy focuses on three key areas:

• Adjacent capabilities to expand service offerings
• Technology tuck-ins to enhance platform functionality
• Companies with existing customer contracts to accelerate market penetration

Subramanian noted that major capital investments in Amagi's core platform, 'Amagi Now', have been completed. The company is now entering a phase of harvesting those investments while deepening its presence in a market still at the beginning of its cloud-driven transformation.