IPO-Bound Fractal In The Black, Posts INR 220 Cr Profit In FY25

IPO-bound Fractal turned profitable in the financial year 2024-2025 (FY25). The AI-powered SaaS startup reported a consolidated net profit of INR 220.6 Cr in the fiscal year under review as against a loss of INR 54.7 Cr in FY24. 

In its draft red herring prospectus (DRHP) for an INR 4,900 Cr IPO, the startup shared its bottom-line numbers.

Fractal’s operating revenue stood at INR 2,765.4 Cr in FY25, up 25.9% from INR 2,196.3 Cr a year ago. This marks a continued upward trajectory from INR 1,985.4 Cr in FY23. 

The startup also saw its other income increase 11.4% to INR 50.8 Cr in FY25 from INR 45.6 Cr in FY24. 

Total income for the fiscal year under review stood at INR 2,816.2 Cr, up 25.% from INR 2241.9 Cr in FY24.

PAT and EBIDTA margins also jumped to 12.6% and 17.4% in FY25 from 0.2% and 10.6%, respectively, in FY24. 

Founded in 2000 by Srikanth Velamakanni and Pranay Agrawal, Fractal offers a range of AI-powered analytics solutions to enterprises globally. Its product suite also includes enterprise agentic AI platform Cogentiq, GenAI-powered recruiting platform Iqigai and text-to-image generator Kalaido.ai, among others. It counts the likes of Google and Wells Fargo among its clients. 

The startup generates revenue through analytics and consulting services, as well as license and subscription fees for its proprietary AI products and platforms. 

Making its second attempt at going public after initial plans to hit bourses in 2021, Fractal this time is offering fresh issues worth up to INR 1,279.3 Cr and an offer-for-sale (OFS) component of up to INR 3,620.7 Cr. 

PE firms Apax Partners and TPG, GLM Family Trust, Satya Kumari Remala and Rao Venkateswara Remala will offload shares as part of the OFS. 

The fresh proceeds from the IPO will be used for repaying or pre-paying the borrowings of its US-based subsidiary, buying laptops, setting up new office premises, to fuel research and development (R&D) and boost sales and marketing initiatives. 

The company may also consider a pre-IPO placement aggregating up to INR 255.8 Cr. If undertaken, the IPO price will be decided by the company again. 

Recently, Fractal also raised $170 Mn through a secondary share sale at $2.44 Bn valuation. The deal involved the sale of a 6% stake held by Apax Partners to a consortium of 22 institutional investors. 

Where did Fractal spend?

Fractal’s total expenses for FY25 also surged 14.4% at INR 2,575.5 Cr from INR 2,250.6 Cr in FY24. These were driven by employee benefits and employee stock options, finance costs and depreciation and amortisation (D&A) and other expenses. 

Employee benefits expense: This segment accounted for the largest share of expenses. It increased 15.4% to INR 2,004.8 Cr in FY25 from INR 1,737 Cr in FY24. 

Employee stock option expense: The cost under this head stood at INR 79.8 Cr, down 20.6% from INR 96.3 Cr. 

Depreciation and amortisation: D&A cost of Fractal total expenses at INR 102.3 Cr from INR 83.2 Cr in FY24.

Other Expenses: Other expenses which accounted for costs like outsourced manpower, legal and professional fees, software licence and maintenance, travelling and conveyance, cloud and communication, recruitment, marketing, repairs and maintenance (computers and others), facility management, rent, rates and taxes, insurance, rose 14.2% to INR 330.9 from INR 289.6 Cr in the last fiscal year.