IPO Overview
Capillary Technologies IPO has opened for subscription with a total issue size of ₹877.50 crores. The public issue combines a fresh issue of ₹345 crores and an offer for sale (OFS) of ₹532.50 crores. The company aims to raise capital for cloud infrastructure expansion, R&D investments, and potential acquisitions.
Key IPO Highlights:
- IPO Dates: November 14-18, 2025
- Price Band: ₹549-577 per share
- Lot Size: 25 shares
- Minimum Investment: ₹14,425 (for retail investors)
- Listing Date: November 21, 2025 (tentative)
- Exchanges: BSE, NSE
Subscription Status (Day 3)
As of November 18, 2025 (2:59 PM), Capillary Technologies IPO has witnessed strong demand across all investor categories:
| Category | Subscription |
|---|---|
| Overall | 27.59x |
| QIB (Ex-Anchor) | 23.95x |
| NII (HNI) | 48.39x |
| Retail | 7.91x |
| Employee | 4.49x |
The issue received 5,19,180 applications, indicating robust investor interest. The NII segment showed exceptional enthusiasm with nearly 48x subscription.
Company Background
Capillary Technologies is a leading SaaS-based customer loyalty platform founded in 2008. Headquartered in Bengaluru, the company serves over 250 brands across 30+ countries including Tata, Domino’s, PUMA, Jockey, and Shell.
Core Business Segments:
- Loyalty Management Solutions
- Customer Engagement & Marketing Automation
- AI-Powered Analytics & Insights
- Omnichannel CRM Solutions
Financial Performance Analysis
The company’s financial trajectory shows a remarkable turnaround from losses to profitability:
| Particulars | FY25 | FY24 | FY23 |
|---|---|---|---|
| Revenue | ₹611.87 Cr | ₹535.44 Cr | ₹266.25 Cr |
| PAT | ₹14.15 Cr | -₹68.35 Cr | -₹88.56 Cr |
| EBITDA | ₹78.57 Cr | -₹1.49 Cr | -₹58.34 Cr |
| Net Worth | ₹481.42 Cr | ₹452.13 Cr | ₹99.75 Cr |
Key Observations:
- Revenue grew 14% YoY (FY25 vs FY24)
- PAT surged 121% turning profitable in FY25
- EBITDA margin improved to 13.13% in FY25
- Strong balance sheet with debt-to-equity ratio of 0.18
However, the annualized H1 FY26 numbers show marginal profitability with PAT of just ₹1.03 crores (Sep 2025), raising questions about consistency.
Valuation Assessment
Post-Issue Metrics:
- Market Cap: ₹4,576 crores
- EPS (Post-Issue): ₹0.26
- P/E Ratio: 2214.95x
- Price-to-Book: 8.87x
Valuation Concerns: The issue appears aggressively priced considering:
- Ultra-high P/E ratio of 2200+ times
- Recent quarterly profitability pressure
- Limited earnings track record
IPO Fund Utilization
| Purpose | Amount (₹ Cr) |
|---|---|
| Cloud Infrastructure | 120.00 |
| R&D & Product Development | 151.54 |
| IT Equipment Purchase | 10.32 |
| Acquisitions & Corporate Use | Balance |
The fund allocation appears growth-focused, emphasizing technology infrastructure and product innovation.
Strengths
✅ Market Leadership: Dominant player in loyalty management space
✅ Global Footprint: 250+ brands across 30+ countries
✅ Scalable SaaS Model: Recurring revenue with high retention
✅ Strong Clientele: Blue-chip customers across retail, FMCG, hospitality
✅ Profitability: Turned profitable in FY25 after years of losses
✅ Technology Edge: AI/ML-powered analytics platform
Concerns & Risks
⚠️ Aggressive Pricing: P/E over 2200x is significantly stretched
⚠️ Thin Margins: Recent quarterly PAT of just ₹1 crore raises sustainability concerns
⚠️ Competition: Intense rivalry from global SaaS giants
⚠️ Customer Concentration: Heavy dependence on large enterprise clients
⚠️ OFS Heavy: 60% of issue is OFS (promoter/investor exit)
Expert Recommendations Summary
| Reviewer | Rating | Comment |
|---|---|---|
| Dilip Davda | Neutral-Avoid | “Aggressively priced, only for risk-seekers” |
| Broker Consensus | Mixed | 1 Subscribe, 2 Neutral, 2 Avoid |
| Member Views | Cautious | 2 Subscribe, 1 Avoid |
Investment Perspective
For Long-Term Investors: The loyalty management sector has strong structural growth potential in India’s digital economy. Capillary’s market position and client base provide a solid foundation. However, the current valuation leaves minimal margin of safety.
For Listing Gains Seekers: With 27.59x subscription and strong anchor backing (₹394 crores), there could be decent listing pop potential. However, sustainability beyond initial euphoria remains questionable given stretched valuations.
Risk Profile Assessment
High Risk, High Reward: This IPO suits aggressive investors with:
- High risk appetite
- 3-5 year investment horizon
- Understanding of SaaS business models
- Ability to withstand 30-40% volatility
Conservative investors should exercise extreme caution or avoid entirely.
Final Verdict
Capillary Technologies operates in a promising sector with genuine business moats. The company has demonstrated the ability to turn profitable and serves marquee clients globally. However, the valuation appears stretched for the current earnings profile.
Recommendation:
- Aggressive/HNI Investors: Consider with 10-15% allocation for long-term
- Retail/Conservative Investors: Avoid or wait for post-listing correction
- Grey Market Premium: Monitor GMP closer to listing for short-term cues
The issue may see strong listing gains given subscription momentum, but long-term wealth creation depends on consistent earnings growth and margin expansion over the next 2-3 years.
Disclaimer: This analysis is for educational purposes only. Investors should conduct independent research and consult financial advisors before making investment decisions. Stock markets are subject to risks, and past performance doesn’t guarantee future returns.
Information Source – SEBI Public Issues
