Fractal Analytics Files Draft Red Herring Prospectus for IPO

Fractal Analytics, a leader in AI solutions, has submitted its draft red herring prospectus (DRHP) to SEBI aimed at raising up to Rs 4,900 crore through a combination of fresh issue and offer for sale (OFS). The proposed IPO includes a fresh issue of shares valued at Rs 1,279 crore and an OFS amounting to Rs 3,620.7 crore, provided by current shareholders. Major selling shareholders consist of Apax Partners-owned Quinag Bidco with Rs 1,463 crore, TPG Fett Holdings at Rs 2,000 crore, as well as Satya Kumari Remala and Rao Venkateswara Remala with Rs 29.5 crore, and GLM Family Trust at Rs 129 crore.

Details on the Upcoming Offer

In the DRHP, it is noted that the company is contemplating a pre-IPO placement of up to Rs 255.8 crore, which will subsequently reduce the fresh issue size. The equity shares are set to be listed on BSE (Bombay Stock Exchange) and NSE (National Stock Exchange).

Management and Use of Proceeds

Fractal has selected Kotak Mahindra Capital, Morgan Stanley, Axis Capital, and Goldman Sachs as the book-running lead managers for the issue, with MUFG Intime India acting as the registrar. The anticipated proceeds from the fresh issue are designated for funding organic and inorganic growth initiatives, meeting working capital needs, and addressing general corporate requirements.

Stakeholder Information

As outlined in the DRHP, TPG Fett holds the largest share at 25.67%, followed by Apax Partners-owned Quinag Bidco at 18.78%. GLM Family Trust also holds a significant portion with 15.7% of the capital structure.

Fractal’s Market Performance and Global Reach

Fractal operates in the advanced analytics and AI solutions sector, catering to enterprises across diverse industries such as healthcare, retail, financial services, and technology. Its brand portfolio includes subsidiaries like Qure.ai, Asper.ai, Cuddle.ai, and Analytics Vidhya, which serve a global clientele across the US, UK, Canada, Australia, and beyond.

Financial Highlights

In terms of financial performance, Fractal disclosed a consolidated revenue of Rs 2,765 crore in FY25, an increase from Rs 2,196 crore in FY24. The company reported a net profit of Rs 220.6 crore in FY25, a notable recovery from a loss of Rs 54.7 crore in the preceding fiscal year ending March 2024. This improvement is attributed to the increasing demand for AI-led decision-making platforms and expansion into crucial markets.

Recent Fundraising Efforts

Prior to filing the DRHP, Fractal Analytics successfully raised $172 million (approximately Rs 1,461 crore) through a secondary share sale, where Apax Partners divested a 6% stake to 22 investors, including Trust Investment Advisors.