Capillary Technologies India Limited

IPO Details

Company Overview

Capillary Technologies headquartered in Bengaluru, India, is a software product company offering artificial intelligence (“AI”)-based cloud-native Software-as-a-Service (“SaaS”) products and solutions to large enterprise customers globally, aiming to establish loyalty among their consumers and channel partners. It is one of the global leaders in loyalty and engagement management.

As of Sep 2025, they provide a comprehensive set of AI-led SaaS products for customer relationship management (“CRM”) and the loyalty management industry. With a decade-long track record, they have established themselves as a leader in the global loyalty solutions industry in terms of email marketing tools, marketing automation platforms, loyalty solutions, rewards programs, account-based marketing tool (“ABM”), customer support tools, CDP, CRM and analytics / business intelligence tools. They are a differentiated Hybrid SaaS platform that combines vertical depth through industry-specific solutions with horizontal scalability across sectors, enabling it to deliver tailored loyalty and engagement offerings. Their platform offers competitive implementation speed, which serves as a key differentiator and adds value for customers.

Capillary Technologies serves over 390 brands including a growing base of Fortune 500 clients and engages with more than 120 crore consumers through its platform, powering 500+ loyalty programs and enabling 124,000 customer touchpoints. The company employs over 700 professionals worldwide, with 13 offices located globally. Notable clients include Aditya Birla Fashion and Retail Ltd., Abbott Laboratories (Singapore) Pvt. Ltd., Tata Digital Pvt. Ltd., Frontier Communications and others.

Key Highlights

Objects of the Issue

Our View

Incorporated in 2012, Capillary Technologies is an AI-led, cloud-native SaaS company that enables enterprises to design, manage, and scale customer loyalty and engagement programs. As of 30 September 2025, the company served over 410 brands across 47 countries, with a presence in 16 offices worldwide.

It has expanded its customer base through both Organic growth and Inorganic growth. The use of artificial intelligence and predictive analytics in the company’s products enables clients to make data-driven conclusions that enhance repeat sales and customer lifetime value.

However, risks to consider are Intense Competition, revenue concentration from top 10 customers (~55% in Q1FY26), ability to develop and innovate, platform products and solutions in a cost efficient and timely manner, Negative cash flow and Losses in past years, dependence on third party service providers, credit risk, operational and sector-specific risks, india and international regulation risk thereby impacting overall operational efficiency.

On the financial front, the Revenue grew at CAGR of 53% from FY23-FY25 while the PAT turned positive in FY25 and Q1FY26. There was improvement in EBITDA and Net worth of the company. The company operated on an EBITDA margin of 11.09% and PAT margin of 0.29% at Q1FY26 respectively and ROCE at 0.5%.

The issue is priced at a P/BV of 8.41 based on its NAV of Rs. 68.59 as of June 30, 2025 and asking price is at a P/E of ~1,200x if we attribute FY26 annualized earnings. The Industry average P/E is ~34x. The issue is very aggressively priced. Capillary Technologies offers investors an opportunity to contribute in a rapidly growing sector of SaaS that serves high-end consumer brands in India and globally but, Looking at all the factors, risks, opportunities and valuation, we have cautious view for the issue.

KEY RISKS