Capillary Technologies IPO: Grey Market Premium Dips as Subscription Opens

Capillary Technologies, an AI-based SaaS company, has launched its Initial Public Offering (IPO) with mixed market reception. The Rs 877.5 crore offering has seen some interesting developments in its early stages.

Subscription and Grey Market Performance

The IPO opened for subscription with the following key points:

Total Offering: Rs 877.5 crore
Day 1 Subscription: 28% of the total offering
Grey Market Premium (GMP) Movement:
- Initial GMP: Rs 50
- Current GMP: Rs 23
- Decline: 54%

The significant drop in the grey market premium suggests tempered enthusiasm among unofficial market participants. Despite this, the current GMP still indicates a potential, albeit modest, listing gain of approximately 4%.

Company Performance

Capillary Technologies has shown promising financial results recently:

Metric	Q2 FY26	Q2 FY25	Change
Profit	1.03	-10.28	Turnaround to profit
Revenue	359.22	N/A	25% growth

The company's transition from a loss in Q2 FY25 to a profit in Q2 FY26, coupled with a 25% year-over-year revenue growth, demonstrates improving financial health.

Investor Considerations

While the grey market premium has decreased, it's important to note that the grey market is unofficial and not regulated. Investors should focus on the company's fundamentals, growth prospects, and the overall market conditions when making investment decisions.

The initial subscription rate of 28% on Day 1 indicates moderate interest from investors. However, it's common for subscriptions to pick up pace in the later days of an IPO.

As Capillary Technologies operates in the AI-based SaaS sector, potential investors might want to consider the growth potential of this industry and the company's position within it. The recent financial turnaround could be a positive sign, but it's crucial to examine the sustainability of this growth and profitability.

Investors are advised to read the IPO prospectus carefully and consider their risk appetite before making any investment decisions.

Capillary Technologies Ltd., an AI-based loyalty management solutions provider, is set to launch its Initial Public Offering (IPO) on November 14, 2023. The company aims to raise Rs 877.5 crore through a combination of fresh issue and offer-for-sale. Here's what investors need to know about this upcoming IPO:

IPO Details

Particulars	Details
IPO Size	Rs 877.5 crore
Fresh Issue	Rs 345 crore
Offer-for-Sale	Rs 532.5 crore
Price Band	Rs 549 - Rs 577 per share
Lot Size	25 shares
Minimum Investment	Rs 14,425 (for retail investors)
IPO Date	November 14-18, 2023
Listing Date	November 21, 2023
Listing Exchanges	BSE and NSE

Company Overview

Capillary Technologies is a Software-as-a-Service (SaaS) company that specializes in providing AI-based loyalty management solutions. The company's services are utilized by over 393 brands across 46 countries, highlighting its global presence and market reach.

Financial Performance

The company has shown improvement in its financial performance:

Metric	Q2 FY24	Q2 FY23	YoY Change
Net Profit	Rs 1.03 crore	Rs 10.28 crore loss	Turned Profitable
Revenue	Rs 359.22 crore	-	25% growth

IPO Proceeds Utilization

The funds raised through the fresh issue will be allocated towards:

Cloud infrastructure enhancement
Research and Development (R&D)
Potential acquisitions
General corporate purposes

Market Sentiment

The grey market premium for Capillary Technologies IPO currently stands at nil, suggesting expectations of a flat listing. However, it's important to note that grey market premiums are unofficial and subject to change.

Lead Manager

JM Financial is serving as the lead manager for this IPO.

Investors interested in the Capillary Technologies IPO should conduct thorough research and consider their financial goals before making an investment decision. As always, it's advisable to read the Red Herring Prospectus (RHP) for comprehensive details about the company, its business model, and associated risks.