Fractal Analytics IPO listing today: AI play may see modest start

Fractal Analytics IPO listing: Analysts expect the stock to see a modest listing pop rather than a sharp surge, based on current unofficial trends. By Meghna Sen Shares of Fractal Analytics, among the first pure-play Indian artificial intelligence firms to tap the public markets, are set to list on the bourses on Monday, February 16. Grey market signals indicate a muted debut. The grey market premium for Fractal Analytics was quoted at ₹11, implying a likely discount of about 1.22% to the issue price. That said, grey market trends are unofficial and speculative, and the actual listing price could vary significantly. Shivani Nyati of Swastika Investmart said the stock may see a modest listing pop rather than a sharp surge, based on current unofficial trends. She advised a balanced approach after listing. Short-term investors chasing listing gains could consider partial profit booking if the stock opens at a premium, given elevated valuations and volatile AI-sector sentiment. Long-term investors, however, may look to stay invested considering the company’s positioning in the fast-growing global AI and analytics space. Mahesh M Ojha of Kantilal Chhaganlal Securities said that in the absence of directly comparable listed peers in India or overseas with a similar model, the pricing appears reasonable given the sector's growth prospects. He added that while the business operates in a high-growth segment, it also carries elevated risk, making it suitable for investors with a higher risk appetite. Fresh investors may prefer to wait for price discovery post listing. The ₹2,834 crore IPO was subscribed 2.66 times at close, with bids for 4.94 crore shares against 1.85 crore shares on offer. The company fixed a price band of ₹857 to ₹900 per share, seeking a valuation of up to ₹14,450 crore at the upper end. Issue structure and use of proceeds The offer consists of a fresh issue of ₹1,023.5 crore and an offer for sale worth ₹1,810.4 crore. Selling shareholders in the OFS include Quinag Bidco Ltd, TPG Fett Holdings Pte. Ltd, Satya Kumari Remala Rao, Venkateswara Remala and GLM Family Trust. Promoter holding is expected to decline from 18.18% before the issue to 16.98% after the listing. A portion of the proceeds will be deployed in its subsidiary to repay certain borrowings. The company also plans to allocate funds towards laptops, new office spaces, research and development, sales and marketing, and potential inorganic acquisitions, though specific targets have not been disclosed. Business profile Backed by global investors such as TPG, Apax Partners and Gaja Capital, Fractal Analytics operates as a pure-play data and AI company with expertise across consumer packaged goods and retail, technology, media and telecom, healthcare and life sciences, and BFSI. Founded in 2000, the company serves several global technology and consumer giants, including Microsoft and Alphabet. Fractal had earlier reduced its issue size by over 40% after being advised to leave some headroom for investors, as artificial intelligence remains a relatively new investment theme, CEO Srikanth Velamakanni told Reuters recently. The listing also comes at a time when concerns over AI-led disruption have sparked volatility in global software stocks. Vipul Bhowar, senior director at Waterfield Advisors, said that the timing may be challenging, as investors weigh the impact of advanced AI tools such as Anthropic on traditional data analytics and software businesses. Note To Readers Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.