IPO closes on 18 Nov'25
Capillary Technologies India Ltd
Minimum Investment
₹ 14,425 / 25 shares
Our Verdict:
Avoid
- Capillary Technologies India Ltd (CTIL) has recorded healthy topline growth in recent years. However, profitability remains a concern. The company reported losses in FY24 and FY23 and has only recently turned profitable in FY25. The long-term earnings consistency is yet to be established.
- Valuations further weaken the near-term investment case. At an estimated P/E of ~299x FY25 earnings, the IPO appears overvalued, leaving little room for meaningful near-term upside.
- On the industry front, the global loyalty management market is witnessing strong expansion. The sector, valued at $16.6 billion in FY24, is projected to grow to $26.8 billion by FY29, indicating a robust 10% CAGR. While the IPO offers exposure to a fast-growing global enterprise SaaS opportunity, elevated valuations and the lack of proven profitability make the risk-reward equation unfavourable at present.
- The long-term potential remains attractive given rising enterprise focus on customer retention and increasing adoption of AI-led loyalty and CX platforms. However, the competitive landscape is intense, with CTIL competing against global heavyweights such as Salesforce, Adobe and HubSpot.
- Given these factors, a wait-and-watch approach is recommended. It would be prudent to evaluate the firm’s performance over the next two quarters and consider exposure only once profitability sustains and earnings visibility strengthens.
About the company
Founded in
15 Mar'12
Managing director
Aneesh Reddy Boddu
- CTIL is a global AI-driven, cloud-native SaaS provider specialising in enterprise loyalty management and omni-channel customer engagement. Its product suite—Loyalty+, Engage+, Insights+, Rewards+ and a Customer Data Platform (CDP)—functions as a unified technology stack that enables enterprises to design, manage and scale personalised customer journeys across both digital and offline touchpoints.
- At the core of CTIL’s platform is aiRA, its proprietary AI engine that drives predictive insights, advanced customer segmentation and automation-led personalisation to enhance engagement effectiveness.
STRENGTHS
- Strong Global Presence: CTIL has built a significant international footprint with operations across 47 countries, serving 410+ enterprise brands, including 19 Fortune Global 500 clients. This extensive reach positions the company as a leading player in the rapidly expanding global loyalty-tech ecosystem.
- Improving Financials: CTIL’s revenue recorded an impressive CAGR of approximately 53% between FY23 and FY25. Profitability has also strengthened— EBITA improved from a loss of Rs (58) crore to a profit of Rs 78 crore, while net profit turned around from a loss of Rs (88) crore to a profit of Rs 14 crore over the same period, highlighting operational efficiency and scale benefits.
- High Customer Stickiness: CTIL has a proven ability to build long-term relationships with global brands, with a major share of growth coming from existing clients. Net Revenue Retention (NRR) remains strong at 115.42% in H1FY26 and 121% in FY25, reflecting strong upsell and cross-sell capabilities. Client churn remains extremely low at 9.64% (H1FY26) and 5.98% (FY25), indicating high customer satisfaction and platform dependency.
RISK FACTORS
- Weak Track Record: CTIL reported losses in H1FY25, FY24 and FY23. Some of its material subsidiaries have also incurred losses in the past. While the company turned profitable in FY25, there is no certainty that this improvement will continue.
- Client Concentration: CTIL faces significant customer concentration risk. The top 5 and top 10 clients contributed 38.60% and 55.70% of revenue in H1FY26 and 43.35% and 58.71% in FY25, respectively.
- Geographic Concentration: CTIL derives a major share of its revenue from North America, which accounted for around 56% in both H1FY26 and FY25, exposing the business to region-specific economic and regulatory risks.
- Cash Flow Concerns: CTIL has reported negative cash flows in H1FY25, FY25 and FY23. Continued negative cash flow generation may strain liquidity, affect working capital and impact the company’s ability to meet operational and financial obligations.
- High Trade Receivables: CTIL typically extends credit terms of up to 90 days, increasing its exposure to credit risk. Trade receivables stood at around Rs 185 crore in H1FY26, representing 51.5% of revenue from operations, which may impact cash flow and working capital efficiency.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 877.50 crore
Fresh Issue
₹ 345 crore
OFS
₹ 532.50 crore
Price range
₹ 549 - 577
Lot size
25 shares
Issue Objective
The net proceeds from the fresh issue will be utilised for the following purposes:
- Funding cloud infrastructure requirements;
- Investment in research, design and development of products and platform;
- Purchase of computer systems and related hardware for business operations; and
- Funding inorganic growth through potential acquisitions and for general corporate purposes.
Dates
Bidding open
14 Nov'25
Bidding close
18 Nov'25
Allotment date
19 Nov'25
Refund date
20 Nov'25
Listing
21 Nov'25
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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