Today, the AI story is not well understood in the Indian market, according to Srikanth Velamakanni, the Group Chief Executive and Executive Vice-Chairman of Fractal Analytics. Fractal Analytics, founded in 2000, is a global enterprise AI company and was India's first AI unicorn. Velamakanni's statement highlights a crucial need for market education regarding AI, especially considering the limited number of AI-focused stocks available in the Indian market.
Velamakanni is a prominent figure in India's AI landscape, advocating for the development of sovereign AI technologies. He also serves as the Vice-Chairman of Nasscom and has contributed to the conceptualization of the IndiaAI mission. His entrepreneurial journey began with a desire to create impactful solutions, leading Fractal to focus on using AI and analytics to predict human behavior for better business decisions.
Fractal Analytics has established itself as a key player in the AI domain, offering end-to-end AI solutions to large global enterprises across various industries, including BFSI, healthcare, retail, CPG, and technology. The company's operations are divided into Fractal.ai, which focuses on AI services and platforms, and Fractal Alpha, which houses product-led AI businesses. Fractal's products include Qure.ai, Cuddle.ai, Theremin.ai, and Eugenie.ai, which assist in areas such as radiology diagnostics, executive decision-making, investment decisions, and anomaly detection in data.
Velamakanni believes Indian firms need to increase their technology spending to fully leverage AI tools. He suggested that companies should aim to double their technology expenditure in the coming years, with a significant portion of this investment directed towards AI.
Fractal Analytics is preparing to launch its IPO on February 9, with the issue closing on February 11 and listing scheduled for February 16. The IPO aims to raise ₹2,834 crore and includes both a fresh issue of shares and an offer for sale by existing shareholders. The price band for the IPO is set at ₹857 to ₹900 per share, with a minimum investment of 16 shares. The company intends to use the fresh issue proceeds to repay debt, invest in R&D, expand sales and marketing, set up new offices in India, and pursue acquisitions.
The IPO has garnered significant interest, with grey market premiums signaling expectations of a strong debut. Fractal Analytics serves major global clients, including Microsoft, Amazon, Alphabet, Meta, Apple, and Nvidia, with a substantial portion of its revenue coming from US clients. For FY25, Fractal reported revenue of ₹2,765 crore, a year-on-year increase of nearly 26%, and a profit after tax of ₹22 crore.
While Fractal possesses strong capabilities in AI, engineering, and design, operating in a high-growth market, it also faces challenges such as cybersecurity risks, data protection, and dependence on skilled talent. Despite these challenges, Fractal Analytics is well-positioned to capitalize on the increasing adoption of AI and the growing demand for AI service providers.