Fractal Analytics, a provider of artificial intelligence services, is considering filing for an initial public offering in India as soon as November to raise $500 million, Bloomberg reported on Wednesday, citing people familiar with the matter.
Fractal, known as India’s first AI unicorn, may seek a valuation of at least $3.5 billion in the share sale, the report said, adding that the offering may include both new and existing shares.
The firm became a unicorn in 2022 when it raised $360 million in fresh financing from the global alternative asset firm TPG.
India has turned into a hotspot for dealmaking activity amid increasing appetite from global investors. Private equity (PE) and venture capital (VC) investors are making the most of India’s buoyant stock markets by realising exits through public market sales.
PE firms typically score exits from their investments through strategic sales, public listings, recapitalisation, and secondary sales. A strategic sale is usually the most popular exit route for PEs and VCs, given that strategic buyers, who are from the same industry as the target company, tend to be the most natural acquirers.
However, in recent times, the share of public market listings has risen in India given the country’s soaring public markets. The benchmark BSE Sensex has risen 22% in the last year buoyed by the country’s strong GDP growth, renewed capex cycle, thriving credit growth, and rising domestic consumption, among other things.
PE and VC investors have encashed at least $7.6 billion from public market sales on India’s bourses in Jan-July 2024, accounting for 60% of the value of all exits ($12.6 billion) in the country.
Fractal’s listing could take place as soon as the first quarter of 2025, the report added.
