India’s First AI IPO - The Fractal Analytics Story

The 90s had the Walkman - music became portable, and suddenly every commute had a soundtrack.

The 00s had the World Wide Web - information became searchable, and the entire world’s knowledge sat waiting behind a dial-up tone.

The 10s had the smartphone - everything became an app, and life itself became something you could swipe through.

The 20s have AI - intelligence became collaborative, and now machines don’t just listen, they answer back.

But when it comes to investing in this intelligence, Indian investors mostly have to look overseas - Alphabet. Apple. Microsoft. Nvidia.

This is about to change.

India is going to see its first pure-play AI IPO.

And the company at the centre of that story is Fractal Analytics Ltd.

Founded in 2000 by Srikanth Velamakanni and Pranay Agrawal, Fractal is India’s leading enterprise-focused data, analytics, and artificial intelligence company.

Unlike traditional IT firms, it positions itself as an end-to-end AI partner, helping global enterprises turn data into actionable decisions.

Fractal works across industries where data is mission-critical.

Its clients span consumer packaged goods and retail (Nestle), technology, media and telecom (Meta), healthcare and life sciences (Philips), and banking, financial services and insurance (Franklin Templeton).

In each of these sectors, the goal is the same: use AI to improve outcomes, efficiency, and strategy.

The timing for such a business could not be more relevant.

The global data, analytics and AI (DAAI) market is expanding rapidly.

In FY25, the market size stood at about $143 billion. By FY30, it is expected to grow to $310 billion, implying a healthy CAGR of 16.7%.

As enterprises push harder to become data-led, demand for AI-driven insights has surged.

But building AI capabilities in-house is not easy.

Talent is scarce, technologies evolve quickly, and costs can spiral. Managing multiple vendors only adds complexity.

This is why large organisations increasingly prefer full-stack AI partners like Fractal, rather than assembling fragmented solutions on their own.

Fractal’s financials reflect this rising demand.

Revenue from operations grew from ₹2,196 crore in FY24 to ₹2,765 crore in FY25.

The company also turned profitable during this period, reporting a profit after tax of ₹221 crore in FY25, compared to a loss of ₹55 crore the previous year.

The business operates through two main segments.

Fractal.ai is the core engine, housing AI services and AI-led products. It contributes nearly all of the company’s revenue.

In FY25, this segment generated ₹2,704 crore, accounting for 97.7% of total revenue.

Fractal Alpha, on the other hand, focuses on building independent AI businesses aimed at new markets and geographies.

While still small, it represents Fractal’s long-term optionality. In FY25, it contributed ₹64 crore, or 2.3% of revenue.

Geographically, Fractal’s business is largely global.

The United States remains its largest market, contributing 65.2% of FY25 revenue.

Europe follows with 17.5%, while India accounts for 8.4%. The remaining 8.9% comes from the rest of the world.

This global exposure underlines Fractal’s positioning as an enterprise AI company rather than a domestically focused IT services firm.

What truly differentiates Fractal, however, lies in its client stickiness and innovation-led approach.

Its net revenue retention has consistently remained strong, standing at 151% in FY23, moderating to 110.2% in FY24, and improving again to 121.3% in FY25.

This indicates that existing clients not only stay but also expand their spending over time.

Innovation remains a priority.

Fractal has steadily invested in research and development, spending ₹144 crore on R&D in FY25, up from ₹142 crore in FY24 and ₹116 crore in FY23.

R&D expenditure has hovered between 5% and 6.5% of revenue, highlighting a sustained focus on building proprietary AI capabilities.

Competition in the AI and analytics space is intense.

Fractal operates alongside diversified IT service providers like Accenture and Happiest Minds, as well as pure-play DAAI firms such as LatentView, Quantiphi, and Tiger Analytics.

It also competes globally with product-focused AI companies like C3.ai and Palantir.

The upcoming IPO could mark a significant milestone.

Fractal Analytics’ public issue is expected to include a fresh issue of ₹1,024 crore and an offer for sale of ₹1,810 crore, taking the total issue size to ₹2,834 crore.

Fractal has been building AI capabilities long before artificial intelligence became a buzzword.

Now, it may become the first company to bring pure-play enterprise AI exposure to the Indian public markets.

Sources:

Fractal Analytics DRHP