About the Company
Capillary Technologies India Ltd is a Bengaluru-based software company (SaaS = Software as a Service) that helps big brands understand and engage with their customers better. Think of it like a “smart brain” for businesses—it collects customer data (like purchase history, preferences), analyzes it using artificial intelligence, and helps companies send personalized offers and loyalty rewards. Founded in 2008 by Aneesh Reddy, the company works with big brands like Tata Digital, Puma, Metro Brands, Dominos, and even 19 Global Fortune 500 companies. Their platform hosts 1.82 billion customers across 47 countries and helps businesses in retail, healthcare, banking, and travel sectors.
READ FULL DRHP HERE:|SEBI DRHP CAPILLARY TECHNOLOGY|
IPO Details Table
| Detail | Explanation | Data |
|---|---|---|
| IPO Opening Date | Buy shares from | 14 Nov 2025 |
| IPO Closing Date | Last date to apply | 18 Nov 2025 |
| Price Band | Price range for shares | ₹549 – ₹577 |
| Lot Size | Min. shares to buy | 25 shares (~₹14,425 at upper band) |
| Total Issue Size | Max money raised | ₹877.50 crore |
| Fresh Issue | New shares, money goes to company | ₹345 crore (0.60 crore shares) |
| Offer for Sale (OFS) | Old owners sell shares | ₹532.50 crore (0.92 crore shares) |
| Total Shares Offered | How many shares | 1.52 crore shares |
| Listing Date | Shares start trading | 21 Nov 2025 |
| Face Value | Company unit value | ₹2 per share |
| Registrar | Share allocation handler | MUFG Intime India Private Limited |
| Book Managers | IPO arrangers | JM Financial, IIFL Capital, Nomura |
What Will the IPO Money Be Used For?
| Purpose | Amount (₹ Cr) | Explanation |
|---|---|---|
| Cloud infrastructure (servers, data centers) | 120 | Build strong tech backbone for faster service |
| R&D (Research & Development) | 151.54 | Create new AI products and features |
| Computer systems & equipment | 10.32 | Office infrastructure and tech upgrades |
| Acquisitions & general corporate needs | Remaining | Buy smaller tech companies or business needs |
Total Fresh Issue: ₹345 crore going to company for growth
IPO Timeline
| Event | Date |
|---|---|
| Anchor Bidding | 13 Nov 2025 |
| IPO Opens | 14 Nov 2025 |
| IPO Closes | 18 Nov 2025 (5 PM) |
| Allotment Date | 19 Nov 2025 |
| Refunds Issued | 20 Nov 2025 |
| Shares to Demat | 20 Nov 2025 |
| Listing Date | 21 Nov 2025 |
Business Model & Revenue Structure (Easy Explanation)
How Capillary Makes Money:
- Subscription/Retainership Fees (54% of revenue)
- Brands pay monthly or yearly fees to use Capillary’s loyalty software
- Pricing: Depends on customer size and data volume
- Examples: Tata Digital, Puma, Metro Brands pay recurring fees
- This is the most important revenue—recurring and predictable
- Installation Services (6% of revenue)
- Capillary helps brands set up the loyalty system
- One-time charges for integration and customization
- Example: When Dominos starts using Capillary, they pay to install it
- Campaign Services (1% of revenue)
- Brands pay extra for targeted promotional campaigns
- Capillary helps design and run customer loyalty campaigns
- Professional Services
- Consulting for how to use data better
- Training staff on the platform
Revenue Breakdown by Industry (H1 FY26):
| Industry | % of Revenue | Examples |
|---|---|---|
| Retail | 30% | Malls, clothing stores, supermarkets |
| Healthcare | 17.6% | Hospitals, clinics |
| Banking & Finance (BFSI) | 16.2% | Banks, insurance |
| Travel/Hospitality | 15% | Airlines, hotels |
| Auto/Others | 21.2% | Car dealerships, energy companies |
Key Financial Metrics (Simple Numbers)
| Metric | FY23 | FY24 | FY25 | H1 FY26 | What It Means |
|---|---|---|---|---|---|
| Revenue | ₹255 Cr | ₹525 Cr | ₹598 Cr | ₹359 Cr (annualized ~₹718 Cr) | Growing 14% YoY |
| Profit After Tax | ₹(87.71) Cr loss | ₹(59.37) Cr loss | ₹13.28 Cr profit | ₹1 Cr profit (without tax credit) | |
| EBITDA | ₹(58) Cr loss | ₹(1.49) Cr loss | ₹78.57 Cr | Strong profit from operations | |
| EBITDA Margin | Negative | Negative | 13.13% | 22% (H1 FY26 operating margin) | |
| PAT Margin | Negative | Negative | 2.37% | Low but improving | |
| Employee Cost | ~₹330 Cr (est FY25) | ~₹155 Cr (FY24) | Growth | ₹174.3 Cr (H1 FY26) | About 28-30% of revenue—major cost |
| ROE | Negative | Negative | 17.11% | Improving | |
| ROCE | Negative | Negative | 2.76% | Weak, needs improvement | |
| Debt-to-Equity | — | — | 0.18 | Low debt, financial stability | |
| Net Worth | — | ₹700+ Cr | — | Strong balance sheet |
Key Points:
- Recently Profitable: Just turned profitable in FY25 after years of losses
- Rapid Growth: From ₹525 Cr to ₹598 Cr revenue in FY25 (+14%)
- High Employee Costs: 28-30% of revenue goes to salaries (software engineers are expensive)
- Improving: Losses declining, moving to profitability
- Platform Effect: 1.82 billion customers on platform—strong network
Cost of Acquisition – For Promoters
- Capillary started from scratch in 2008, founded by Aneesh Reddy, Krishna Mehra, and Ajay Modani
- Initial investment: Estimated ₹20-50 crore for software development in early years
- Strategic Acquisitions Made by Capillary:
- Persuade Group (CRM software company)
- Brierley & Partners (loyalty technology)
- Kognitiv Group (customer data platform)
- Digital Connect from Tenerity LLC (rewards management)
- Total acquisition investment: ~₹200-300 crore estimated
- Current Valuation at IPO: ₹4,576.09 crore market cap
- Promoter Gain: 50-100x+ returns on initial investment over 17 years
OFS Component: Existing investors selling ₹532.50 crore worth of shares (partial exit to take profits)
Industry Analysis – SaaS & Loyalty Technology
Massive Growth Opportunity:
| Metric | Current Status | Opportunity |
|---|---|---|
| Global Loyalty Tech Market | $20-25 billion | Growing 12-15% annually |
| AI/ML in Retail | $5-10 billion market | Growing 25%+ yearly |
| India’s Digital Retail | ₹50,000+ Cr | Growing rapidly with e-commerce |
| Customer Data Market | Emerging | High demand for personalization |
Capillary’s Market Position:
- **#1 or2 in India’s loyalty technology market
- 413 brands across 47 countries
- 1.82 billion consumers on platform
- 19 Global Fortune 500 clients
- Competes with Salesforce Marketing Cloud, Adobe Experience Cloud (global), Vymo (local)
Growth & Strengths
Major Strengths:
- Recurring Revenue Model
- Subscriptions = predictable cash flow
- Net Revenue Retention of 115% = customers keep spending more
- Artificial Intelligence Focus
- Uses AI/ML for predictive insights
- Future-proof business model
- Increasingly important for businesses
- Global Presence
- Serves 47 countries, not just India
- 19 Fortune 500 companies
- Diversified revenue stream
- Strong Customer Base
- Average customer stays 2.5+ years
- Low churn rate of 9.64%
- High customer satisfaction
- Acquired Key Technologies
- Strategic acquisitions strengthened product suite
- Now offers end-to-end loyalty solutions
- Recently Profitable
- Turned profitable in FY25 after years of losses
- Moving in right direction
- Low Debt
- Debt-to-equity of just 0.18
- Strong balance sheet
Key Risks & Concerns
Major Risks:
| Risk | Why It Matters | Impact |
|---|---|---|
| Still Modest Profitability | Net profit of ₹13 Cr is very small vs revenue ₹598 Cr | Profit margins still low at 2.37% |
| High Employee Costs | 28-30% of revenue goes to salaries | Software engineers leave = quality drops |
| Valuation Very High | P/E ratio of 299x is extremely expensive | Stock price may fall heavily after IPO |
| Strong Global Competition | Competes with Salesforce, Adobe (huge US companies) | Hard to compete with giants |
| Customer Concentration | Top 10 customers = majority of revenue | Loss of one big customer = revenue disaster |
| Integration Risk | Made 4 acquisitions—need to integrate well | Failed integrations can destroy value |
| Forex Exposure | 40%+ revenue from overseas | Currency fluctuations hurt profits |
| Heavy R&D Spending | Keeps investing to stay competitive | R&D costs drain profits |
Valuation – Is It Expensive?
| Metric | Capillary | Typical SaaS Companies | Comment |
|---|---|---|---|
| P/E Ratio | 299x (FY25) | 30-50x | EXTREMELY EXPENSIVE |
| Price-to-Book | 8.87x | 3-5x | Premium valuation |
| EV/Revenue | 7-8x | 5-10x | High for current profitability |
| Market Cap | ₹4,576 Cr | — | Mid-cap company |
IPO FAQS
What is an IPO?
- An IPO (Initial Public Offering) is when a private company sells its shares to the public for the first time to raise money.
- Example: If a well-known pizza company wants to grow, it can list its shares on the stock exchange so anyone can buy a piece of the company.
How can you apply for an IPO (using Zerodha or Upstox)?
- Make sure you have a Demat account and your bank account is linked.
- Steps:
- Log in to your broker’s app (e.g., Zerodha Kite, Upstox).
- Go to the IPO section.
- Select the company’s IPO you want to apply for.
- Enter how many shares (or ‘lots’) you want and the price you wish to bid.
- Enter your UPI ID, submit your application, and approve the UPI payment request.
How are IPO shares allotted?
- If more people want shares than are available, the company uses a lottery system to decide who gets them.
- If you don’t get shares, your money is simply returned.
What is GMP (Grey Market Premium)?
- GMP shows the extra price people are willing to pay for IPO shares before they officially start trading.
- Example: If IPO price is ₹100 and GMP is ₹20, people are unofficially ready to pay ₹120. It hints at the IPO’s popularity but isn’t a guarantee.
Where to check upcoming IPOs (IPO calendar)?
- Visit popular finance sites like Chittorgarh, IPOWatch, or official exchange websites (NSE, BSE) and look for the “Upcoming IPO” section.
What are IPO listing gains?
- If the share’s price rises on the first trading day, you can make instant profit.
- Example: You buy at ₹150, and it opens at ₹200, you gain ₹50 per share.
How can you make profit from an IPO?
- Quick gains on listing day (if the stock price goes up).
- Long-term: If the company grows, the share price could increase further.
Which IPO is best to buy?
- There is no single best IPO. Check the company’s background, current demand, and GMP, but always research before investing.
- High GMP or popularity doesn’t guarantee profits.
Are IPOs safe?
- IPOs can be profitable but also risky; prices can go up or down sharply.
- Only invest if you are ready for potential losses.
How to check IPO allotment status?
- After the IPO process, check on exchanges (BSE/NSE websites) or the IPO registrar’s site (like K-Fintech, Bigshare,or mufg-intime) by entering your PAN or application number to see if you got shares.
Important Tips for Retail Investors Applying for an IPO
- Use Only Your Own PAN Card:
Avoid using the same PAN card for multiple IPO applications. For example, if you have already applied using your PAN for one IPO, don’t try to apply again with the same PAN under different accounts or through others. - Apply in the Right Category:
Ensure you select the correct investor category (such as Retail Individual Investor) when filling out your application. Applying under a wrong category can lead to rejection or disqualification. - Maintain Sufficient Bank Balance:
Before applying, ensure your bank account linked to the application has enough funds to cover the full bid amount. For instance, if the IPO application requires a payment of ₹15000, make sure your account holds at least that amount. - Use Your Own Bank Account:
Always apply through your own bank account. Using someone else’s account can cause your application to be rejected during the verification process. - Avoid Last-Minute Applications:
Don’t wait until the deadline day or moments before to apply. Last-minute submissions may face technical glitches or processing delays, reducing the chances of success.