Nvidia-Tesla tie-up: India set for first AI IPO after Fractal Analytics wins Sebi nod

Fractal Analytics, one of India’s most prominent artificial intelligence companies, has received approval from capital markets regulator Sebi for its proposed initial public offering, paving the way for what would become the country’s first listed AI-led company. The Sebi approval, published in the regulator’s latest processing update, brings the 25-year-old company closer to a public market debut.The IPO will consist of a fresh issue of shares worth Rs 1,279 crore and an offer for sale of up to Rs 3,621 crore by existing shareholders. The selling shareholders include Quinag Bidco, TPG Fett Holdings, Satya Kumari Remala and Rao Venkateswara Remala, and GLM Family Trust. According to a report from Bloomberg, the listing could value the company at more than $3.5 billion.

Founded in 2000 by Srikanth Velamakanni and Pranay Agrawal, Fractal is a leading AI company offering end-to-end decision intelligence, advanced analytics and AI-powered products to major global companies. Its client list includes some of the world’s most valuable companies, including Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta and Tesla.Fractal currently earns more than 65% of its revenue from US customers and operates in New York and Mumbai.

The company plans to use the proceeds from the new issue to strengthen its global operations. This includes funding its US subsidiary Fractal USA to prepay or repay loans, buying laptops for employees, building new office space in India, expanding its AI and GenAI product development pipeline and pursuing acquisitions as part of its inorganic growth strategy.

Backed by TPG, Apax and Gaja Capital, Fractal has raised over $800 million to date. The company has expanded its AI software stack and R&D capabilities, positioning itself as a full-stack AI provider for industries such as consumer goods, retail, telecom, healthcare and financial services. As of March 2025, Fractal reported revenues of Rs 2,765 crore, up 25.9% from the previous year. Profit after tax improved to Rs 22 crore after a loss of Rs 5.47 crore in FY24, driven by stronger margins and higher operating leverage. The EBITDA margin increased from 10.6% to 17.4%. The approval comes at a time when global investment in AI infrastructure is accelerating. India has become a key market of interest, with Google committing $15 billion for a new AI data center in Andhra Pradesh, while Microsoft and Amazon continue to expand their cloud and data center footprints.

Fractal’s CEO Velamakanni told Reuters that the company plans to maintain and possibly increase its already high R&D spending to stay competitive as demand for AI services rises globally.

Kotak Mahindra Capital, Morgan Stanley India, Axis Capital and Goldman Sachs (India) Securities are the lead managers for the IPO.

Now that Sebi has given the go-ahead, market participants expect the offering to attract significant interest as the company becomes the first pureplay AI company to test the interest of public investors in India.