Capillary Technologies IPO: A Crucial Test for Market Sentiment
The Indian primary market is set to welcome a new player as Capillary Technologies India, a leading software-as-a-service (SaaS) company, opens its initial public offering (IPO) for public subscription on Friday, November 14. This move comes at a time when secondary market sentiment is showing signs of improvement, fueled by expectations of corporate earnings growth and positive developments regarding an India-US trade deal.
Grey Market Sentiment and IPO Details
Despite the broader market optimism, sources from the unofficial grey market suggest a lack of immediate investor excitement for this mainboard IPO. The final grey market premium (GMP) for Capillary Technologies shares was reported as nil on November 13. This typically indicates that the shares are expected to list on the stock exchanges at or very close to their issue price, offering little potential for quick, listing-day gains for subscribers.
The IPO will conclude on Tuesday, November 18. This ₹877.50 crore book build issue is a combination of a fresh issue and an offer for sale (OFS). The company aims to raise ₹345 crores by issuing 60 lakh new shares, while the OFS component involves the sale of 92.3 lakh shares amounting to ₹532.50 crore by existing shareholders.
A Deep Dive into the IPO Structure and Financials
The price band for the IPO has been fixed in the range of ₹549 to ₹577 per equity share. For retail investors, the lot size is set at 25 shares. This means the minimum investment required is ₹14,425 (based on the upper price band of ₹577), while the maximum investment for retail bidders can go up to ₹1,87,525 for 13 lots.
The reservation policy allocates 75% of the net issue to qualified institutional buyers (QIBs), 10% to retail investors, and the remaining 15% to non-institutional investors (NIIs).
Financially, Capillary Technologies has demonstrated a remarkable turnaround. The company, which suffered a loss of ₹88.56 crore in FY23, managed to narrow its losses to ₹68.35 crore in FY24. Most notably, it swung to a profit of ₹14.15 crore in FY25. Its total income has seen impressive growth, climbing from ₹266.25 crore in FY23 to ₹535.44 crore in FY24, and further to ₹611.87 crore in FY25.
The net proceeds from the fresh issue are earmarked for several strategic initiatives, including:
- Funding cloud infrastructure costs.
- Investment in research, design, and development of its products and platform.
- Purchase of computer systems for its business.
- Funding inorganic growth through unidentified acquisitions and general corporate purposes.
What Investors Need to Know: Timeline and Business Model
As per the schedule, the share allotment is expected to be finalized on Wednesday, November 19. Successful allottees will receive the shares in their demat accounts on Thursday, November 20, with refunds initiated the same day for those who did not receive an allocation. The much-anticipated listing on both the BSE and NSE is scheduled for Friday, November 21.
Capillary Technologies is a software product company offering AI-based, cloud-native SaaS solutions primarily to enterprise customers across the globe. The book-running lead managers for the issue are JM Financial, IIFL Capital Services, and Nomura Financial Advisory and Securities (India) Private Limited. MUFG Intime India Pvt. Ltd. is acting as the registrar.
This IPO presents a critical opportunity for investors to gain exposure to a growing Indian SaaS player, albeit amidst cautious signals from the grey market. Potential investors are advised to carefully consider the company's financial trajectory and business prospects before applying.
