Shares of Capillary Technologies are up 13% after a tepid debut. Should you buy, sell or hold the shares?

Capillary Technologies India shook off a lackluster listing to stage a sharp intraday rebound on Friday, with its shares rising as much as 13% on the BSE to Rs 633 from their opening price of Rs 560, reigniting investor interest in the SaaS player just hours after it debuted at a discount to its IPO price.In an understated debut, Capillary Technologies India listed at a 2.9% discount to its issue price of Rs 577 on the BSE, opening at Rs 560. On the NSE, the stock started trading at Rs 571.90, a 0.9% discount to its IPO price. However, sentiment quickly changed as buying interest increased during the session.

On the BSE, the stock climbed to an intraday high of Rs 633, up 13% from the opening high. On the NSE, it rose as much as 10.8% to reach Rs 633.9 from the opening level of Rs 571.9.This strong move came despite the fact that the outlook for the gray market at the time of listing appeared to be more optimistic than reality. The last GMP for Capillary Technologies’ IPO was Rs 55 before the shares hit the stock exchanges, implying an expected gain of 9.53%. Instead, shares opened at a discount of about 3%.

Capillary Technologies IPO Snapshot

The Rs 878 crore issue, which closed on November 18, saw strong demand across categories. Qualified institutional buyers (QIBs) have subscribed 57.3 times, non-institutional investors (NIIs) have bid 69.85 times and retail investors have subscribed 15.85 times.

Ahead of the public issue, the company raised Rs 393.98 crore from major investors on November 13, allotting 68.28 lakh shares to global and domestic institutions.

The IPO consisted of a fresh issue of Rs 345.2 crore and an offer for sale worth Rs 532.5 crore, with shares priced at Rs 577 each – the top end of the price range.

Should you buy, sell or hold Capillary Technologies?

Shivani Nyati, Head of Wealth at Swastika Investmart, weighed in on the stock’s debut and prospects, saying the subdued listing indicates cautious investor sentiment despite Capillary’s strong positioning as a SaaS-based customer engagement and loyalty solutions provider serving major retail and consumer brands in India and global markets. She said Capillary’s core strengths remain intact.

“Capillary’s strengths lie in its AI-driven loyalty management platform, deep enterprise customer relationships, strong presence in Asia and the Middle East, and consistent revenue growth driven by subscription-based recurring revenue. Its diversified product suite, which includes loyalty programs, customer data platforms and engagement automation, provides scalability and visibility into long-term growth,” Nyati said. However, she cautioned that the market is weighing significant risks.

Investors remain wary due to intense competition in the SaaS and martech sectors, higher customer acquisition costs and the company’s need to increase profitability to justify valuations,” Nyati said.

On the strategy for investors who received shares in the IPO, Nyati said, “Given the listing discount, investors and traders who are allocated shares may consider holding the shares with a medium to long-term perspective while maintaining a strict stop-loss near Rs 520 to manage downside risk.”

Capillary’s business and finances

Capillary Technologies is among India’s leading SaaS companies in customer loyalty, omnichannel CRM and AI-driven engagement. The software stack supports more than 250 brands in 30 countries, including Tata, Shell, Domino’s, Jockey and PUMA. Revenue is generated primarily through subscription fees, marketing automation services, analytics tools and enterprise loyalty platforms.

The company’s financial profile has improved in recent years. After posting losses in FY24, Capillary turned profitable in FY25, with a PAT of Rs 14.15 crore compared to a loss of Rs 68.35 crore in the previous year. Total income rose 14% year-on-year to Rs 611.87 crore. For the six months ended September 2025, revenue stood at Rs 362.56 crore, while profit stood at Rs 1.03 crore.

Proceeds from the new release will be used to expand cloud infrastructure, boost research and product development, strengthen IT hardware and fund potential acquisitions. About Rs 143 crore is allocated to cloud infrastructure costs, while another Rs 71.58 crore is for R&D investments.

Brokerages noted that Capillary’s SaaS-driven, recurring revenue model offers strong visibility and customer retention, but also emphasized that valuations remain aggressive.

Also read | Capillary Technologies shares are off to a lukewarm start, trading at a 3% discount to the IPO price

(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of the Economic Times)