Fractal Analytics IPO Witnesses Subdued Investor Interest on Debut
The much-anticipated initial public offering (IPO) of artificial intelligence and analytics firm Fractal Analytics commenced its subscription period today, February 09, but encountered a notably lukewarm reception from the investment community. According to the latest exchange data, the issue managed to attract bids for only 15.80 lakh shares against the massive offering of 1.85 crore shares, resulting in an overall subscription rate of a mere 0.09 times by the close of the first day.
Detailed Breakdown of Subscription Figures
A closer examination of the subscription data reveals a varied response across different investor categories. The retail investor segment demonstrated relatively more interest, with the portion reserved for them being subscribed 0.35 times. In stark contrast, Non-Institutional Investors (NIIs) showed minimal enthusiasm, booking their quota just 0.07 times. The employee reservation portion was subscribed 0.13 times. It is important to note that the qualified institutional buyers' (QIB) portion has not yet opened for bidding, which could potentially alter the overall subscription dynamics in the coming days.
Comprehensive Issue Details and Financial Structure
The Fractal Analytics IPO represents a substantial ₹2,834 crore offering, structured as a combination of fresh issuance and an offer for sale. The fresh issue component comprises 1.14 crore shares, aggregating to ₹1,023.50 crore, while the offer for sale involves 2.01 crore shares, totaling ₹1,810.40 crore. The company has established a price band of ₹857 to ₹900 per equity share. For retail investors, the lot size is set at 16 shares, translating to a minimum investment requirement of ₹14,400 based on the upper price band.
This mainboard IPO is scheduled to list on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), with a tentative listing date set for Monday, February 16. Kotak Mahindra Capital Co. Ltd. is serving as the book-running lead manager for this offering, while MUFG Intime India Pvt. Ltd. has been appointed as the registrar.
Allotment Timeline and Procedural Details
The allotment process for the Fractal Analytics IPO is expected to be finalized on Thursday, February 12. Following this, the company will initiate the refund process for unsuccessful applicants on Friday, February 13. Successful allottees will have their shares credited directly to their demat accounts on the same day, immediately after the completion of the refund procedure.
Strategic Utilization of IPO Proceeds
Fractal Analytics has outlined a comprehensive plan for deploying the capital raised through this public offering. A significant portion of the proceeds will be directed toward supporting one of its subsidiaries in settling outstanding debts. Additionally, the company intends to allocate funds for several strategic initiatives, including the procurement of new laptops, securing additional office premises, and substantial investments in research and development activities. The capital will also fuel enhanced sales and marketing efforts, along with potential undisclosed acquisitions to strengthen its market position.
Grey Market Premium and Listing Price Projections
In the unofficial grey market, the Fractal Analytics IPO is currently commanding a premium of ₹14 per share. This grey market premium (GMP) suggests that the stock is anticipated to list above its issue price. Based on this premium and the upper price band of ₹900, the estimated listing price stands at approximately ₹914 per share. This represents a marginal premium of about 1.56% over the upper end of the price band.
It is crucial for investors to understand that the GMP serves as an early, unofficial indicator of market sentiment and should not be considered the sole determinant for investment decisions. The actual listing price may vary based on final subscription levels and broader market conditions at the time of listing.
Company Background and Business Overview
Founded in the year 2000, Fractal Analytics has established itself as a globally recognized enterprise artificial intelligence company. The organization specializes in providing data-driven insights and decision-making support to large global corporations through its comprehensive, end-to-end AI solutions. With an operational history spanning more than 25 years, the company has developed deep technical, domain, and functional capabilities that form the foundation of its AI offerings.
Fractal's AI solutions are strategically organized into two distinct segments. The first, Fractal.ai, encompasses AI services and products primarily hosted on the Cogentiq platform. The second segment, Fractal Alpha, comprises AI-driven businesses. Through these complementary segments, Fractal Analytics addresses the diverse and complex business requirements of clients across multiple industries and functional areas, as detailed in the Draft Red Herring Prospectus (DHRP) filed with regulatory authorities.
Disclaimer: Investors are strongly advised to consult with certified financial experts and conduct thorough due diligence before making any investment decisions related to this or any other public offering.
