Fractal CEO Discusses AI Fears on IPO

• Fractal.ai segment: Agentic AI platform called Cogentiq delivering AI-led services and products[5] • Fractal Alpha: Product-led, IP-driven AI businesses offering subscription or licensable solutions[2] • Business model: B2B with long-term enterprise contracts across BFSI, healthcare, retail, CPG, and technology sectors[2] • Asset-light operational model generating significant revenue from long-term enterprise analytics contracts[3] • IPO proceeds allocation: 34.69% to R&D and sales/marketing (Fractal Alpha), 25.88% to debt repayment in USA subsidiary, 22.02% to inorganic growth and strategic initiatives[2]

Fractal Analytics' weak IPO reception (0.23x subscription, negative GMP, 3% listing discount) suggests investor caution regarding AI sector valuations despite strong fundamentals. The company's positioning at the intersection of generative AI, decision intelligence platforms, and enterprise automation indicates growth potential, but premium valuation (100x+ FY25 earnings) and uneven profitability history reflect market skepticism about AI business sustainability. Expansion into healthcare AI and platform monetization are expected growth drivers, though execution risk remains elevated given the challenging IPO environment.