India’s Fractal Analytics $314 million IPO fully subscribed on final day of bidding

By Vivek Kumar M

Feb 11 (Reuters) – Fractal Analytics’ $314-million initial public offering, the first for a pure-play Indian artificial intelligence firm, was ‌fully subscribed on the final day of bidding on Wednesday.

The Mumbai-based ‌company received bids for 27.23 million shares as of 1:39 p.m. IST, against 18.58 million ​shares on offer, exchange data showed.

Fractal set a price band of 857 rupees to 900 rupees per share and is seeking a valuation of up to 144.5 billion rupees ($1.59 billion) at the upper-end of the band.

Founded in 2000, ‌the enterprise AI and analytics ⁠company counts some of the world’s largest technology and consumer firms, such as Microsoft and Alphabet, among its clients.

Fractal ⁠had trimmed its issue size by over 40% after it was advised to “leave money on the table”, as AI is a new investment category for investors, ​CEO ​Srikanth Velamakanni told Reuters last week.

The IPO ​comes amid global fears of ‌artificial intelligence-driven disruption that have triggered a sell-off in software stocks.

“Unfortunately for Fractal, its IPO has come at a time when there is a lot of concern around impact of AI tools like Anthropic on data analytics and software businesses,” said Vipul Bhowar, senior director at Waterfield Advisors.

Qualified institutional ‌investors led the subscriptions, bidding for 2 ​times the number of shares on offer for ​them, while the portions ​set aside for retail and non-institutional investors were subscribed 77% ‌and 45%, respectively.

Lack of valuation comfort ​kept investors cautious, ​two analysts said.

SBICAPS Securities said the valuation looks elevated given the relatively modest compounded annual revenue growth of 18% between fiscal years 2023 ​and 2025.

Shares of the ‌company are expected to debut on the bourses on February ​16.

(Reporting by Komal Salecha and Vivek Kumar M in Bengaluru; Editing ​by Sonia Cheema and Mrigank Dhaniwala)