Fractal Analytics, an AI company, launches at a price that is over 3% less than its IPO price

Artificial intelligence (AI) firm Fractal Analytics made a subdued stock market debut on Monday, with its shares listing at a discount to the issue price despite strong global investments flowing into AI technologies that are expected to accelerate the replacement of legacy IT systems.

The stock opened at Rs 876 on the National Stock Exchange of India, nearly 3% below its issue price of Rs 900. On the Bombay Stock Exchange, it debuted flat at Rs 900. The shares ended the day at Rs 847.1, giving the company a market capitalisation of around Rs 14,405 crore.

The listing comes after a significant downsizing of its initial public offering (IPO). Fractal reduced its issue size by about 42% to Rs 2,834 crore from the earlier planned Rs 4,900 crore. The offering comprised a fresh issue of Rs 1,023.5 crore and an offer for sale (OFS) worth Rs 1,810.4 crore.

The IPO was priced at a 26% discount to the company’s last private market valuation. At the issue price, Fractal was valued at approximately Rs 15,473 crore on a post-money basis, compared with around Rs 20,978 crore in July 2025.

In an earlier interaction with The Economic Times, cofounder and group CEO Srikanth Velamakanni said public market investors assess AI companies differently from specialised private investors, who often take a thematic approach and spend more time understanding the sector. He added that the company could have raised capital at a higher valuation in the private markets.

Based on the NSE listing price, Velamakanni’s stake was valued at around Rs 769.3 crore.

On February 16, The Economic Times had reported that several new-age companies going public in recent months had trimmed their issue sizes and accepted lower valuations amid volatile equity markets and changing investor expectations. Industry executives said these recent listings would serve as benchmarks for institutional investors evaluating upcoming IPOs.

Fractal’s IPO was subscribed 2.66 times and was fully subscribed on the final day of the three-day book-building process. Ahead of the IPO, the company raised about Rs 1,248.2 crore from anchor investors, with domestic mutual funds accounting for nearly 38% of the anchor portion.

Founded in 2000, Fractal Analytics provides data-driven insights and AI solutions to large enterprises across sectors. For the six months ended September 2025, the company reported operating revenue of Rs 1,559 crore, up from Rs 1,300 crore in the corresponding period a year earlier. Its net profit stood at Rs 70.9 crore, slightly lower than Rs 72.9 crore in the year-ago period.