Fractal Analytics, India's first artificial intelligence unicorn, is set to make its debut on the Indian stock market with a substantial initial public offering (IPO). The company aims to raise approximately ₹4,900 crore ($555 million) through this offering, marking a significant milestone in India's burgeoning AI and analytics sector.

IPO Details

Key Highlights

• Fractal Analytics has initiated discussions with potential investors, signaling the commencement of its IPO process.
• The offering comprises both new shares and a stake sale by existing investors, including TPG Inc. and Apax Partners LLP.
• Group CEO Srikanth Velamakanni and CEO Pranay Agrawal, each holding about 10% stake, are not selling their shares in this IPO.

Company Background

Founded in 2000, Fractal Analytics achieved unicorn status in 2022, solidifying its position as a leader in the AI and analytics space. The company's decision to go public comes at a time when India's IPO market is showing robust activity.

Market Context

Fractal's IPO is part of a strong wave of public offerings in India, reflecting growing investor confidence in the country's tech and AI sectors. This listing could potentially set a benchmark for other AI and analytics firms considering public market entry.

Advisors

The share sale is being managed by a consortium of leading financial institutions:

• Axis Bank Ltd.
• Goldman Sachs Group Inc.
• Kotak Mahindra Capital Co.
• Morgan Stanley

This high-profile IPO is expected to draw significant attention from both domestic and international investors, potentially paving the way for more AI and tech companies to access public markets in India.

India's first AI unicorn, Fractal Analytics, has taken a significant step towards going public by filing for an Initial Public Offering (IPO) in Mumbai. The company is eyeing a substantial ₹4,900 crore ($560 million) offering, which could potentially value the AI and analytics services provider at over ₹29,000 crore ($3.5 billion).

IPO Structure and Existing Investors

The IPO structure includes:

• Fresh issue of shares worth ₹1,279 crore
• Offer for sale by existing investors amounting to ₹3,621 crore

Notable investors participating in the offer for sale include global private equity firms TPG Inc. and Apax Partners.

Company Background and Growth

Fractal Analytics, co-founded in 2000, achieved unicorn status in 2022, marking its position as a leader in the AI and analytics space. The company has built an impressive client roster, serving global giants such as Citigroup, Royal Philips, and Nestle.

Financial Performance

The company's financial performance underscores its growth trajectory:

Fractal Analytics reported a revenue of ₹2,765 crore, marking a robust 25.9% increase from the previous year. The company also posted a profit of ₹22 crore.

Leadership and Ownership

The current leadership of Fractal Analytics includes:

• Srikanth Velamakanni: Group CEO
• Pranay Agrawal: CEO

Both Velamakanni and Agrawal each own approximately 10% of the company and have chosen not to sell their shares in the upcoming IPO, signaling their confidence in the company's future prospects.

IPO Arrangements

The IPO is being arranged by a consortium of leading financial institutions:

• Kotak Mahindra Bank
• Morgan Stanley
• Axis Capital
• Goldman Sachs

These institutions will play a crucial role in managing and facilitating the public offering process.

Market Impact

As India's first AI unicorn to go public, Fractal Analytics' IPO is likely to draw significant attention from both domestic and international investors. The offering could serve as a benchmark for the valuation of AI and analytics companies in the Indian market and potentially pave the way for more tech unicorns to consider public listings.

The successful completion of this IPO could further solidify India's position as a growing hub for AI and analytics talent and innovation on the global stage.