AI solutions provider Fractal Analytics, co-founded by Srikanth Velamakanni and Pranay Agrawal in 2000, has garnered a muted response from investors in the first two days of bidding, receiving 20% subscription till Tuesday. The ₹2,833-crore initial public offering (IPO) of enterprise artificial intelligence (AI) company, that provides data, analytics, and AI-based solutions to large global organisations, will need a sharp pick-up on the final day, traditionally the most active, to sail through.

Data from the exchanges showed that the Fractal Analytics IPO received bids for 36.40 lakh shares against 1.85 crore shares on offer, led by retail investors. The quota reserved for retail individual investors (RIIs) was subscribed 60% times, while the portion reserved for non-institutional investors was booked 27%. The qualified institutional buyers (QIBs) portion fetched just 2% subscription.

Meanwhile, the employee quota was subscribed 20%, with bids received for 1,56,688 shares against 7,77,202 shares earmarked for them.

GMP slips but remains positive

Amid lackluster response on the two day of bidding, the grey market premium (GMP) of Fractal Analytics shares has softened to ₹7 in the unlisted market. The Fractal Analytics IPO GMP indicates listing price at ₹907, a premium of 0.78% over the issue price of ₹900 apiece.  

Market analysts believe that while the GMP has cooled, it remains in positive territory, suggesting expectations of a flat-to-mildly positive listing rather than a sharp discount.

Brokerages remain constructive

The subdued subscription comes despite a broadly positive stance from several brokerage houses. Analysts at Anand Rathi, BP Wealth, Arihant Capital, Ventura Securities, Swastika Securities, SMIFS, Sushil Finance and Master Trust, among others, have recommended subscribing to the issue, citing Fractal’s strong positioning in enterprise AI, long-standing global client relationships and improving margins.

Brokerages have also highlighted Fractal’s exposure to high-growth areas such as artificial intelligence, advanced analytics and data-driven decision-making, particularly across banking, financial services, healthcare and retail sectors. The company helps Fortune 500 companies, including Google, Citi, and Nestlé, use data-driven insights to automate and improve high-stakes business decisions.

Fractal Analytics IPO comprises a fresh issue of 1.14 crore shares worth ₹1,023.50 crore and an offer for sale (OFS) of 2.01 crore shares aggregating to ₹1,810.40 crore by existing shareholders. The lot size is 16 shares and in multiple thereafter, while minimum application amount for retail investor is ₹14,400 at the upper price band.

The allotment of Fractal Analytics shares are expected to be finalised on February 12. The company is scheduled to list its shares on the BSE and NSE on February 16.

Raised ₹1,248.26 crore from anchor investors

Fractal has trimmed its IPO size from the ₹4,900 crore it had initially proposed and fixed price band at ₹857-900 per share, valuing the company at nearly ₹15,500 crore.

Ahead of the opening of the IPO, the company raised ₹1,248.26 crore from anchor investors by allotting 1,38,69,499 equity shares to 52 anchor investors at ₹900 per share.

As per its DRHP filed with Sebi, Fractal Analytics plans to utilise IPO proceeds for debt reduction, expansion, and growth initiatives. The company will invest ₹264.90 crore in its subsidiary, Fractal USA, towards prepayment or repayment of borrowings. It has earmarked ₹57.10 crore for purchasing laptops to strengthen technology and employee infrastructure, and ₹121.10 crore for setting up new office premises in India.

Additionally, ₹355.10 crore will be invested in research and development, along with sales and marketing under the Fractal Alpha platform. The remaining funds will support inorganic growth through potential acquisitions, strategic initiatives, and general corporate purposes.

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