Investment expert Deven Choksey has issued a 'Subscribe' recommendation for Amagi Media Labs Limited's initial public offering, advising long-term investors to participate in the ₹1,789 crore IPO. The recommendation comes ahead of the company's public listing, with Amagi having already raised ₹805 crores from its anchor book.

Company Overview and Business Model

Amagi Media Labs Limited operates as a cloud-native software-as-a-service (SaaS) company serving the media and entertainment industry. The company provides an integrated platform that enables customers to create, prepare, distribute, and monetize video content across streaming and connected-TV ecosystems. The platform spans the entire workflow from production through content preparation to distribution and monetization, helping customers reduce operational complexity while improving time-to-market for channel launches and advertising monetization.

Strong Financial Performance

The company has demonstrated robust revenue growth over the past three fiscal years, reflecting the scaling adoption of its platform across multiple geographies, particularly in the Americas region.

Expanding Customer Base and Market Reach

Amagi Media Labs has successfully expanded its customer base, demonstrating strong market traction and platform adoption. The growth has been supported by stronger monetized ad impressions and increased distribution throughput across the company's network.

Investment Rationale

Deven Choksey's positive recommendation for long-term investors is based on several key factors:

• Increasing technology penetration in the media and entertainment sector
• Expanding gross margins indicating improved operational efficiency
• Clear visibility of future revenue streams
• Strong geographic diversification with leadership in the Americas region

The investment expert emphasizes that the recommendation is specifically targeted at long-term investors who can benefit from the company's growth trajectory in the evolving streaming and connected-TV landscape.

Amagi Media Labs, a data-driven advertising technology firm specializing in connected TV and digital video advertising, made its market debut with a cautious reception from investors. The IPO opened with just 4% subscription in the early hours, reflecting selective investor sentiment in the current market environment. With 9.73 lakh shares bid against 2.72 crore shares on offer, the response indicates measured investor interest in the adtech space.

Subscription Performance Across Investor Categories

The subscription pattern reveals varying levels of interest across different investor segments. As of 12:20 PM on the first day, the overall subscription stood at 3%, showing a slow but steady start for the issue.

Retail investors demonstrated relatively stronger confidence with 15% subscription of their allocated portion, while institutional participation remained subdued. QIBs have not yet placed any bids, suggesting cautious sentiment among large institutional players.

Grey Market Premium and Listing Expectations

The grey market premium for Amagi Media Labs stands at approximately 4%, translating to ₹16.00 over the issue price of ₹361.00. This modest premium indicates conservative market expectations, with an estimated listing price of around ₹377.00. The relatively low GMP reflects current risk-averse sentiment in equity markets and investor caution toward technology companies.

Financial Performance and Growth Trajectory

Amagi has demonstrated strong revenue growth and improving profitability metrics in recent periods. The company's financial performance shows consistent improvement across key parameters.

The company has successfully transitioned from losses in FY25 to profitability in H1 FY26, posting a net profit of ₹6.47 crore. This improvement reflects the company's operational efficiency and scale benefits in the connected TV advertising ecosystem.

IPO Proceeds and Strategic Investments

The IPO comprises both fresh equity issuance and an offer for sale by existing shareholders. The company has outlined specific deployment plans for the proceeds from the fresh issue.

Market Position and Growth Drivers

Amagi operates in the rapidly expanding connected TV and programmatic advertising sector, enabling advertisers to reach audiences across streaming platforms. The company has established a significant global presence, particularly in the US market, where CTV advertising continues growing as viewers shift from traditional cable television.

The company benefits from increasing advertising spending on connected TV platforms and broader adoption of programmatic advertising solutions by global brands. Operational metrics have improved with margins benefiting from scale efficiencies as the business expands.

Risk Factors and Market Challenges

Like other adtech companies, Amagi faces exposure to fluctuations in advertising budgets, which may decline during economic slowdowns. Additional risk factors include:

• Currency volatility affecting international operations
• Client concentration risks
• Intense competition in global adtech markets
• Regulatory changes in advertising technology

Analyst Recommendations

Brokerages tracking the issue recommend a long-term investment approach rather than focusing on short-term listing gains. Anand Rathi highlighted Amagi's positioning in the connected TV ecosystem and improving financial profile as differentiating factors within India's tech IPO space. However, analysts also note valuation considerations and broader market conditions as near-term variables affecting performance.

Kotak Mahindra Capital Co. Ltd. serves as the book running lead manager, while MUFG Intime India Pvt. Ltd. acts as the registrar for the issue. The measured response to the IPO reflects the current selective approach of investors toward new-age technology offerings in the primary market.