Indian artificial intelligence firm Fractal Analytics is poised to significantly increase its research and development (R&D) spending as it prepares for its market debut, which is yet to be scheduled, according to Chief Executive Officer Srikanth Velamakanni. The company, which focuses on AI-driven decision-making for sizeable enterprises, intends to invest heavily to remain competitive.
Fractal previously spent ₹144 crore ($16.60 million) on R&D in 2025, averaging an expenditure of 6 percent of its revenue over the past three years, as outlined in its red herring prospectus. The firm is currently awaiting approval from India’s securities regulator to proceed with its initial public offering (IPO).
Velamakanni stressed the importance of ongoing investment in AI, stating, “No company can take its AI credibility for granted. If you’re not investing seriously in AI R&D and building at the cutting edge, what is your right to survive or even exist?”
This push for listing comes amid a surge of global investment aimed at developing infrastructure to meet the burgeoning demand for AI services. India is seen as a crucial growth market, with nearly a billion users accessing the internet. Google has announced a substantial $15 billion investment over the next five years to build an AI data center in Andhra Pradesh. Other tech giants, including Microsoft and Amazon, have also committed significant funds to establish data centers in the country.
Headquartered in both New York and Mumbai, Fractal generates over 65 percent of its revenue from U.S. clients, including major companies such as Microsoft, Apple, Nvidia, Google, Amazon, Meta, and Tesla. Velamakanni does not perceive reliance on these tech giants as a risk, pointing out that the company is actively expanding its global revenue streams.
The company derives nearly 10 percent of its revenue from a singular client among the so-called “Magnificent 7.” Velamakanni mentioned, “It’s been a nine-ten year relationship and we see opportunities to expand,” while opting not to disclose the client’s identity.
Fractal Analytics has raised upwards of $800 million in funding from investors, including Quinag Bidco Ltd, Apax Partners, and TPG Fett Holdings. If successful, the upcoming IPO will make Fractal India’s first publicly listed AI-focused company, and Velamakanni hopes this listing will pave the way for other domestic AI firms to access capital more easily.
Other Indian AI startups, like Sarvam and Krutrim, have attracted investments from notable backers such as Peak XV Partners and Matrix Partners India. Fractal seeks to raise ₹4,900 crore ($554.00 million) through its IPO, comprising a fresh issue of up to ₹1,279 crore and a share sale of ₹3,621 crore by existing investors.
Published on November 19, 2025.
