SEBI Clears Fractal Analytics to Launch India’s First AI IPO

Fractal Analytics has received the green light from the Securities and Exchange Board of India (SEBI) to proceed with what will become India’s first initial public offering as an AI company. 

The approval, published on the regulator’s website on November 24, paves the way for the Mumbai-based firm to tap public markets at a time when demand for AI technologies continues to surge globally.

The company is looking to raise about ₹4,900 crore (approximately $563 million) through a combination of fresh shares and an offer for sale by existing shareholders.

Its draft prospectus shows a new issue worth up to ₹1,279 crore, while current investors plan to sell shares totalling roughly ₹3,621 crore. The shareholders looking to divest include Quinag Bidco, TPG Fett Holdings, along with individual investors Satya Kumari Remala and Rao Venkateswara Remala, and the GLM Family Trust. A Bloomberg report suggests the IPO could push Fractal’s valuation beyond $3.5 billion.

A significant portion of the funds will go towards reducing debt at Fractal’s US subsidiary, expanding office presence within India, and accelerating research and development, particularly in generative AI. 

Established in 2000 by Srikanth Velamakanni and Pranay Agrawal, Fractal has grown into one of India’s prominent AI-led enterprises, providing decision intelligence, analytics services and AI products to significant global corporations. Its customer base includes several of the world’s top technology companies such as Microsoft, Apple, NVIDIA, Alphabet, Amazon, Meta and Tesla.

Supported by investors such as TPG, Apax and Gaja Capital, Fractal has secured more than $800 million in funding to date. The firm has been strengthening its AI product suite and research efforts to offer a comprehensive AI platform for industries including consumer goods, retail, telecom, healthcare and financial services.

The company generates over 65% of its revenue from the US and maintains key operations in New York and Mumbai.

Despite the sizeable exit by financial investors, co-founders Velamakanni and Agrawal, along with their families, who own about 20% of the company, will not participate in the share sale.

Morgan Stanley India, Goldman Sachs India, Kotak Mahindra Capital and Axis Capital will act as book-running lead managers for the offering, which is expected to be closely watched as India’s AI sector gains momentum.

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