Fractal Analytics IPO Achieves 2.66 Times Subscription Amid AI Market Uncertainty
Chennai-based Fractal Analytics, India's first pure-play artificial intelligence company, has successfully concluded its initial public offering (IPO), with the issue being subscribed 2.66 times. According to data from the Bombay Stock Exchange (BSE), the IPO received bids for a total of 4.94 crore shares, indicating a moderate level of investor interest despite initial challenges.
Strong Institutional Support Drives Subscription
The qualified institutional buyers (QIBs) category, which includes foreign institutional investors, domestic banks, insurance companies, and mutual funds, played a pivotal role in the subscription. This segment bid for 4.05 crore shares, achieving a subscription rate of 4.18 times the shares reserved for them. In contrast, retail individual investors showed more cautious enthusiasm, with their portion being subscribed 1.03 times. Non-institutional investors subscribed 1.6 times, while the employee reservation segment received 61% bids.
Slow Start and Reduced IPO Size
The Rs 2,834 crore IPO, which opened on Monday, faced a tepid response in its initial days. On the first day, it received only 9% bids, followed by 20% on the second day. This slow uptake occurred despite the company reducing its IPO size by 42% prior to the launch, highlighting the challenging market conditions for new listings in the AI sector.
Expert Insights on AI Investment Trends
Kranthi Bathini, equity strategist at WealthMills Securities, commented on the broader investor sentiment towards AI companies. He noted that due to severe disruptions in the AI industry, many investors are staying away unless they possess a very high risk appetite. "AI as a theme is still evolving, and many participants are in wait-and-watch mode. We are seeing serious money come in only after investors track at least a couple of quarters of performance post-listing. It also reflects a broader market consolidation phase," Bathini explained.
Next Steps for Fractal Analytics
The allotment status for the Fractal Analytics IPO is expected to be finalized on February 12. Following this, the company's shares are anticipated to debut on both the BSE and the National Stock Exchange (NSE) on February 16. This listing will mark a significant milestone for India's AI sector, providing a benchmark for future pure-play AI companies entering the public markets.
The response to this IPO underscores the cautious optimism among investors towards emerging technologies, with institutional backing balancing out retail hesitancy in a volatile market environment.
