Fractal Analytics, the TPG-, Apax-, and Gaja Capital-backed enterprise AI solutions provider, has filed for a Rs 4,900 crore initial public offering (IPO), with listing targeted for December 2025. While the company is positioning itself as a rare “pure-play AI” listing in India, institutional debate is set to focus on whether its growth trajectory and profitability turnaround can justify the premium multiples it is expected to seek, and the extent to which the offer is dominated by private equity exits.
Global AI premium or Indian IT reality
Fractal reported FY25 revenue of Rs 2,765 crore and profit after tax of Rs 220.6 crore, reversing a Rs 54.7 crore loss in FY24. Revenue grew 25.9 percent in FY25, but FY23–24 growth was a more modest 10.6 percent. EBITDA margin improved to 17.4 percent from 10.6 percent.
“As per typical growth companies, a PE of 40 to 50 would normally be targeted by a company growing at 25 percent growth rates,” said Vikas Jaiswal, Founder at Omniscience Capital. “However, it is not clear that Fractal is growing at such high rates. Even with an assumption of 15 percent CAGR, a 40 to 50 PE could be a possible valuation range. Another way would be EV/Rev, where a multiple of around 3 to 4 is targeted,” he added.
Satwik Jain of Generational Capital said investors will benchmark Fractal against both global AI players and domestic IT/analytics firms: “If you price it like a Palantir, you need to demonstrate the scalability of a pure product platform. If the model remains services-heavy, the market will revert to IT services-type valuations.”
Jain added that cash flow quality could also be a swing factor, “When margins are expanding but operating cash flows lag, institutions will dig into whether earnings are translating into cash.”
Growth capital versus PE exit
The IPO comprises a Rs 1,279.3 crore fresh issue and a Rs 3,620.7 crore offer for sale (OFS), meaning roughly 74 percent of proceeds will go to existing shareholders. TPG Fett Holdings plans to sell shares worth Rs 1,999.6 crore, Quinag Bidco (Apax) Rs 1,462.6 crore, and other holders the rest.
Earlier this year, a $170 million secondary transaction saw Apax sell a small portion of its stake while holding most of it, locking in returns but keeping the IPO upside. Buyers included WhiteOak Capital, Gaja, NEO, and a 22-investor SPV — a structure allowing smaller investors pre-IPO access.
“When a majority of the issue is secondary, buyers need to be convinced that the fresh capital is sufficient to accelerate growth,” Jain said. “But PE exits are not necessarily a red flag — these funds operate on fixed lifecycles, and timing is often about their own return realisation, not the company’s health,” he explained.
Jaiswal agreed, noting that “the prospects of the firm should be judged on fundamentals, not just shareholder exits.”
Institutional sentiment
Fractal’s blue-chip client list — Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta, and Tesla — and early investment in AI/GenAI tooling could appeal to thematic global funds. Pure-play AI listings remain scarce in India, which could draw retail and institutional interest.
This is not like the new-age tech companies listed a couple of years back in India, Jaiswal said. “This is a profitable company, though profits have only just been manifested. If profits continue to grow, it should be treated more like an IT services company focused on high-growth analytics and AI services. It is likely to find favour with institutional as well as retail investors.”
Jain suggested that sustained investor enthusiasm will hinge on proving a genuine moat because almost every IT company is embedding AI into its delivery now.
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