Bengaluru-based SaaS company Capillary Technologies has launched its Initial Public Offering (IPO), aiming to raise ₹877.5 crore. The IPO has garnered attention in the market, but analysts are cautioning investors about the company's valuation multiples and growth metrics.

IPO Details

Valuation Concerns

Capillary Technologies, known for its loyalty management platform, has set its valuation multiples at 7.5x EV/sales. This valuation raises eyebrows as it surpasses those of global SaaS majors, despite the company's slowing growth metrics and heavy reliance on acquisitions.

Analyst Recommendations

Financial experts are advising caution to potential investors, citing an unfavorable risk-reward profile. The primary concerns stem from:

1. Slowing growth metrics
2. Heavy dependence on acquisitions
3. Valuation multiples higher than global SaaS leaders

Market Context

The IPO launch comes at a time when the SaaS sector is facing valuation scrutiny globally. Investors are becoming increasingly discerning about growth prospects and sustainable business models in the tech industry.

Investor Considerations

While Capillary Technologies offers exposure to the growing SaaS and loyalty management market, potential investors should carefully weigh the following factors:

• The company's growth strategy and its sustainability
• Comparison with peer companies in the SaaS space
• The premium valuation and its justification
• Long-term potential of the loyalty management platform

As the IPO progresses, it will be crucial to monitor subscription levels and institutional investor interest, which could provide further insights into market sentiment towards the offering.

Capillary Technologies India, an AI-based SaaS company specializing in loyalty management solutions, has announced its Initial Public Offering (IPO) with a price band of Rs 549-577 per equity share. The IPO is set to open for subscription on November 14 and will close on November 18, 2025.

IPO Details

Company Overview

Capillary Technologies India provides loyalty management solutions to over 410 brands across 47 countries. The company's AI-based SaaS platform helps businesses enhance customer engagement and loyalty.

Financial Performance

For the six months ended September 30, 2025, Capillary Technologies reported:

This shows an increase from Rs 287.00 crore reported in the same period last year.

Utilization of IPO Proceeds

The net proceeds from the fresh issue will be allocated as follows:

Market Sentiment

As of the report date, the stock showed no grey market premium, indicating neutral market sentiment towards the IPO.

Investors interested in the AI and SaaS sectors may find this IPO worth considering, given Capillary Technologies' established presence in multiple countries and its focus on loyalty management solutions. However, as with any investment decision, it's crucial to thoroughly research the company's financials, growth prospects, and the overall market conditions before participating in the IPO.