Fractal Analytics Ltd

Fractal Analytics

Fractal Analytics is a pure-play enterprise data, analytics, and AI (DAAI) company with technical (AI, Engineering & Design), domain and functional capabilities. It served 53 clients (over 1M $ turnover) across Consumer goods / Retail (~39% of revenue), TMT (~30%), Healthcare (~14%) and BFSI (~11%) industry in FY25. Some notable clients include - Citi, Costco, Franklin Templeton, Mars, Mondelez, Nationwide, Nestle & Philips. It provides solutions in the form of SaaS as well as contract-based model.

Founded in 2000, by Srikanth Velamakanni (BTech IIT-D, MBA IIM-A & ex-Vice chairperson of Nasscom) along with his friends Nirmal, Pradeep, RK, Pranay. It is backed by marquee investors such as TPG, Apax partners, among others. 

DRHP filed: 12th August 2025

BRLM: Kotak Mahindra Capital, Axis Capital, Morgan Stanley India, Goldman Sachs (India) Securities

Auditor: B S R & Co. LLP

Disclaimer - Delta Partners (public market division under Dexter Capital) is not a SEBI registered Investment Advisor and this report does not constitute a recommendation but is only prepared for educational purposes. We (our team members including our directors) may or may not apply to IPO. 

This note is not reviewed by our CIO - Devendra Agrawal, CFA. It is prepared by our team of Investment Analysts, and is reviewed by our senior team members. Any questions related to the IPO can be directed to shubham@deltainvest.in and we will come back. 

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Delta’s View : Skip

Fractal Analytics operates in the high growth Data & AI solutions industry, with majority revenue through SaaS products, serving global enterprise clients (Nestle, Citi, Costco, Franklin Templeton, Mars, Phillips, etc). It is backed by a great set of promoters & investment firms (TPG, Apax partners, among others). Its diverse deep-pocketed client base (Retail/Consumer goods, Telecom, Media, Healthcare, BFSI, etc), a consistent NRR (Revenue Retention) of over 110%, along with several organically developed AI models, softwares & patents, place it attractively among global peers. Given the IPO valuation of ~5.3x P/S (TTM) and ~85.4x P/E (TTM), we would prefer to track the Company for a few quarters post listing and re-evaluate once valuations become more reasonable and operating profitability demonstrates greater consistency and scalability.

One may expect listing to be flat as per current GMP ~1% (9th Feb 26), provided the GMP sustains.

As AI adoption accelerates, enterprises are increasingly deploying AI solutions to boost productivity, improve decision making and automate core business processes. Fractal Analytics has been at the forefront of delivering such AI-led solutions to marquee global enterprises (Nestle, Citi, Costco, Franklin Templeton, Mars, Phillips, etc), reflected in its revenue growth at ~31% CAGR over the past decade, supported by deep-pocketed, long-tenure clients (served top 10 clients for more than 8 years). Its retention rate (NRR%) of 151% (FY23), 110% (FY24) and 121% (FY25) has been strong, with majority revenue derived from SaaS. 

In addition to having partnerships with Google cloud, Open AI & foundation model providers, it has 4 own GenAI foundation models, 11 AI softwares, 7 Gen-AI softwares and 28 patents (Jan 2026), which sets it apart from its competitors. Fractal’s huge employee strength (5,722 as of Sept 2025) has been dragging its operating profitability in comparison to peers such as LatentView (Pure DAAI player) which generated operating profit of ~23% in FY25 (24% 3-yr avg EBITDA%). However, the company has been able to reduce employee expense % of Sales from 89% (FY23) to 75% (FY25), which has improved its operating profits from -7% (FY23) to 12% (FY25). The company is backed by leading global PE groups such as TPG & Apax partners, and led by promoters Shrikanth & Pranay who possess great quality educational & professional background. 

• Fractal analytics provides Data & AI solutions to enterprises in the form of SaaS & contract based business models. The industry is on a strong growth path, with the DAAI services market expected to grow at ~17% CAGR to 310B $ by FY30, DAAI’s share of overall third party digital services spend forecasted to rise from ~32% to ~44%, while the AI software market is forecast to grow at ~23% CAGR through FY30, as per the Everest Group report. Fractal had demonstrated a strong CAGR of ~29% & ~31% over 5 year & 10 year period respectively. 

• The company serves global clients such as Citi, Costco, Franklin Templeton, Mars, Mondelez, Nationwide, Nestle, Philips, etc which have expanded their services with Fractal. It recorded Net Revenue Retention (NRR) of 151% (FY23), 110% (FY24) and 121% (FY25) and worked with 10 of the 20 largest CPG companies, 8 of the 20 largest TMT companies, and 10 of the 20 largest HLS companies. Its top 10 clients formed ~54% of revenue (FY25), serving them for an average of >8 years. 

• Majority of its successful enterprise AI products & solutions are developed through R&D efforts. It is one of the few companies among its peers having patents, LLM models and AI softwares. As of Jan 19, 2026, it had 28 patents and 38 patent applications, way ahead of Diversified IT service and DAAI service companies which barely have any patents. It has developed 4 GenAI foundation models, namely Vaidya.ai, Kalaido.ai, etc. Its product portfolio includes 11 AI softwares and 7 Gen-AI software, placing it much ahead of industry. It has partnerships with Google Cloud, foundation model providers, AI labs (Open AI), software companies, Enterprise AI software providers (C3 AI), and data aggregators (Nielsen IQ).

• It is backed by notable global PE firms such as Apax partners, TPG, etc, and run by Srikanth (Group CEO) & Pranay (Fractal USA CEO) who graduated from IIM Ahmedabad and hold experience with technology & banking. 

• Fractal’s EBITDA margins had been low (3 yr avg EBITDA margin ~2%) due to large % of employee expense (3 yr avg Employee cost % Sales ~83%), which places it below its peers such as LatentView (Pure DAAI player) which generated operating profit of ~23% in FY25 (24% 3-yr avg EBITDA%). Fractal had a total employee size of 5,722 (as of Sept 2025) but it has managed to reduce employee expense % of Sales from 89% (FY23) to 75% (FY25), which has improved its operating profits from -7% (FY23) to 12% (FY25).

• The company reduced its OFS portion by half from ~3,621 cr (as per DRHP) to 1,810 cr, with no promoters exiting in the IPO. 

Business

• Fractal addresses such needs for Enterprises through its full suite of AI solutions is organized under two segments: 

• Fractal.ai
• Fractal AI is the core business line meant for services and products where it builds customized AI solutions for the client’s specific use case. AI products are designed for industry specific as well as cross-industry use cases.
• This consists of AI services and AI products – AI products are primarily hosted on Cogentiq - flagship agentic AI platform designed to help product owners and enterprises accelerate building and upgrading products through a pre-built suite of agents, tools, connectors with in-built lowcode, security, governance, auditability and inter-operability features.
• Some notable solutions - Cogentiq, Cogentiq CX, Cogentiq data foundation, Cogentiq business insights, Cogentiq SDLC, Cogentiq migration, etc

• Fractal Alpha
• Fractal Alpha is similar to an in-house R&D arm of Fractal which develops products for core MWCs (Must Win Clients) of Fractal and targets integration of acquired businesses
• Some notable products - Kalaido.ai, Vaidya.ai, MarshallGoldsmith.ai, etc

• It addresses clients problems through its AI solutions by -
• Enabling clients to understand their customers’ behavior, segments and patterns
• Forecast demand on basis of that
• Launch new strategies and products 
• Enhance & tailor their products/services for customers
• Create targeted marketing strategies
• Get detailed insights and take data-driven decisions
• Reducing costs and enhancing productivity through automation
• Automate internal operational functions to free up resource for other opportunities
• Implement AI solutions to save costs associated with employing human resource
• Improving productivity per cost through AI-powered automation

• It has partnerships with large-scale cloud infrastructure providers such as Google Cloud, foundation model providers, AI labs such as Open AI, software companies, leading enterprise AI software providers such as C3 AI, and data aggregators such as Nielsen IQ. It has also developed its own foundation models such as Vaidya.ai, kalaido.ai, etc of LLMs, VLMs and LRMs.

• Pricing Model : It operates on 4 different pricing models : (i) fixed price, (ii) subscription and licensing revenue (iii) output based and (iv) time and material

Issue Details

Fresh issue size - Amount → 1,023.5 cr ; Shares → 11.37 million ; To be utilized in -

• Investment in R&D and Sales & Marketing under Fractal Alpha → 355 cr (35%)
• Investment in subsidiary Fractal USA for repayment of borrowings → 265 cr (26%)
• Setting up new office premises in India → 121 cr (12%)
• Purchase of Laptops → 57 cr (6%)
• Funding inorganic growth through unidentified acquisitions and General Corporate Purposes

Offer For Sale size - Amount → 1,810 cr ; Shares → 20.1 million ;

Promoters and Leadership

• Fractal Analytics, incorporated in 2000, was founded by Srikanth Velamakanni, Pranay Agrawal, Nirmal, Pradeep, and R.K. (with one additional early co-founder who exited within the first year).

• Srikanth Velamakanni is a Founder, Whole-time Director, Group CEO and Executive Vice-Chairman of Fractal Analytics; he holds a B.Tech from IIT Delhi and an MBA from IIM Ahmedabad, with ~25 years of experience in technology and currently serves as Vice-Chairperson of NASSCOM.

• Prior to founding Fractal, Srikanth worked as an investment banker at ICICI; an interaction with N.R. Narayana Murthy in 1998 influenced his decision to leave banking and pursue entrepreneurship.

• Pranay Agrawal is a Non-Executive Director of Fractal Analytics India and CEO of Fractal USA; he holds a B.Com from Bangalore University and an MBA from IIM Ahmedabad.

Shareholding Pattern

• Shareholding by Promoters & Promoter group aggregates to ~18% as of RHP date. TPG Fett Holdings is the majority shareholder of the company

Financials