Is Capillary Technologies India IPO Good or Bad – Detailed Review

Capillary Technologies India Limited’s IPO is set to open its initial public offering from November 14, 2025, to November 18, 2025. When considering applying for this IPO, potential investors might have questions about whether the Capillary Technologies India IPO is a good investment and if it's worth subscribing to.

This article provides a comprehensive Capillary Technologies India IPO review, covering its business operations and fundamental analysis to help you make an informed investment decision.

Capillary Technologies India IPO Review

Capillary Technologies India Limited's IPO is open for subscription from November 14, 2025, to November 18, 2025, with listing expected on November 21, 2025, on NSE and BSE.

The company 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. It specialises in developing loyalty, Customer Relationship Management (CRM), and customer engagement solutions for consumers and channel partners across various sectors like Retail, CPG, and BFSI.

Its core business focus is built around an integrated suite of AI-led, cloud-native products, including Loyalty+, Engage+, Insights+, Rewards+, and a Customer Data Platform (CDP), enabling end-to-end loyalty programs. The platform's core revenue comes from the subscription segment, which represented 80.42% of its revenue in FY25.

The platform has a large and growing community with 1.82 billion+ Consumers on the Platform and serves 413 Brands across 47 countries, including 19 Global Fortune 500 companies, as of September 30, 2025. Its core operational strength is a scalable, cloud-native architecture that processed 15.67 billion transactions as of that date. The company is led by its two Promoters: Capillary Technologies International Pte. Ltd. and Aneesh Reddy Boddu (Founder, MD & CEO). The promoters hold an aggregate of 67.83% of the pre-offer paid-up equity share capital.

The company operates within the Global Loyalty Management Market, estimated at USD 16.6 billion in Fiscal 2024 and projected to grow at a global CAGR of 10% to reach USD 26.8 billion by Fiscal 2029. The North American market is its primary growth engine, contributing 56.01% of revenue from operations for the six months ended September 30, 2025.

The industry is highly fragmented and intensely competitive, facing structural challenges like intense competition from global CRM and marketing giants (Salesforce, Adobe), stringent Data Privacy and Governance regulations (GDPR, CCPA), and Integration Complexity with fragmented enterprise stacks. Capillary Technologies India competes with major globally listed SaaS providers in the customer engagement and marketing technology space.

Capillary Technologies India’s financial performance from FY23 to FY25 reflects robust top-line growth coupled with a critical turnaround to net profitability in the latest fiscal year. Revenue from operations grew strongly from Rs 255.37 crores in FY23 to Rs 598.26 crores in FY25 (approx. 53.06% CAGR). Profit After Tax (PAT) achieved net profitability of Rs 13.28 crores in Fiscal 2025, recovering from a substantial loss of Rs 59.38 crores in FY24.

Operating efficiency showed strong recovery, with the Adjusted EBITDA margin improving significantly from -3.00% in FY23 to a positive 12.45% in FY25. The Return on Net Worth (RoNW) recovered from -135.93% in FY23 to a positive 2.85% in FY25.

Key strengths include Global Leadership in AI-Led Loyalty Solutions, high Customer Stickiness with a strong Net Revenue Retention (NRR) of 121.25% in FY25, a Proven Playbook for Strategic Inorganic Growth (M&A), and Strong Financial Momentum with a margin and profitability turnaround.

Risks involve Revenue Concentration and Dependency on a few key clients (Top 10 customers contributed 55.70% of revenue in H1 FY26), Geographic Concentration in North America, Past Financial Instability and negative cash flows from operating activities in FY25, Acquisition and Integration Risk for unidentified targets, and operational dependence on Third-Party Cloud Providers.

The IPO consists of a total issue of 1,52,07,998 shares valued at Rs 877.50 crores, comprising an Offer for Sale (OFS) of 92,28,796 shares (Rs 532.50 crores) and a Fresh Issue of 59,79,202 shares (Rs 345 crores). The proceeds from the Fresh Issue will be used for: Funding Cost for cloud infrastructure (Rs 143 crores), Investment in research, designing, and development of products and platforms (Rs 71.58 crores,) Investment in purchase of computer systems for the business (Rs 10.34 crores), Unidentified Inorganic Acquisitions and General Corporate Purposes (Rs 120.08 crores).

The Shares are priced in the band of Rs 549 to Rs 577 per share, with a Lot Size of 25 Shares.

Company Overview of Capillary Technologies India IPO

Capillary Technologies 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. The core focus is on developing loyalty, customer relationship management (CRM), and customer engagement solutions for consumers and channel partners.

The company is a differentiated hybrid SaaS platform that combines vertical depth through industry-specific solutions (Retail, CPG, Healthcare, BFSI, Travel & Hospitality, and Energy Retail) with horizontal scalability across sectors. Capillary Technologies is recognised as a leader in the global loyalty and engagement management space, with expertise spanning loyalty solutions, marketing automation, Customer Data Platforms (CDP), CRM, and analytics.

Its core business strength is built around an integrated suite of AI-led, cloud-native products:

• Loyalty+: An AI-powered loyalty program management platform.

• Engage+: An AI-powered omnichannel marketing automation platform.

• Insights+: A retail analytics platform providing customer insights.

• Rewards+: A rewards management and engagement platform.

• CDP: A Customer Data Platform that unifies and enriches customer data.

This platform enables end-to-end loyalty programmes and delivers unified, real-time, personalised, cross-channel experiences for consumers. The company also provides Loyalty Consulting and Design Services through its acquired company, named Brierley.

The Company maintains a significant global footprint, serving over 410 brands in 47 countries, including 19 Global Fortune 500 companies.

The geographic split of the revenue from operations for the six months ended September 30, 2025, is detailed below:

As of September 30, 2025, the platform has a large and growing community, driven by its expansive global scale, represented by:

• Consumers on Platform: 1.82 billion+.

• Brands Served: 413 (across various verticals).

• Transactions Processed: 15.67 billion (as of Sep 30, 2025).

The Company is led by its two Promoters: Capillary Technologies International Pte. Ltd. and Aneesh Reddy Boddu. Aneesh Reddy Boddu is the Founder, Managing Director, and Chief Executive Officer. Anant Choubey serves as the Whole-time Director, Chief Financial Officer and Chief Operating Officer. The promoters hold an aggregate of 67.83% of the pre-offer paid-up equity share capital.

Industry Overview of Capillary Technologies India IPO

Capillary Technologies India Limited operates within the highly competitive global loyalty management market, a sector undergoing rapid AI-led technological modernisation and driven by rising customer acquisition costs. The company specialises in AI-based cloud-native SaaS solutions for end-to-end customer loyalty, engagement, and predictive analytics, catering primarily to enterprise customers across the North American, APAC, and EMEA markets.

The Total Addressable Market (TAM) for Global Loyalty Management is estimated to be USD 16.6 billion in Fiscal 2024, anchored by the Retail, Travel & Hospitality, and CPG verticals. This strong trajectory is projected to continue, with the total market expected to grow at a global CAGR of 10% between fiscal 2024 and Fiscal 2029, reaching USD 26.8 billion by Fiscal 2029.

The Asia-Pacific (APAC) region, a key growth area, is projected to grow at a significant CAGR of 18.7% during this period, followed by EMEA at 8.5% and North America at 5.0%. The core subscription segment for the company represented 80.42% of its revenue from operations in fiscal 2025.

The industry is highly fragmented, with numerous niche players operating on outdated technology stacks, which is rapidly accelerating consolidation. Organised players are strategically leveraging cloud-native solutions and M&A (Mergers and Acquisitions) activity to achieve global scale. However, the sector is intensely competitive and faces structural challenges, including:

• Intense Competition and Disruption: Facing aggressive competition from global CRM and marketing giants like Salesforce, Adobe, and HubSpot, as well as rapid technological disruption, particularly in AI and automation, which necessitates continuous R&D investment.

• Data Privacy and Governance: Navigating stringent global regulations (For example, UK GDPR (General Data Protection Regulation), CCPA (California Consumer Privacy Act), India's DPDP (Digital Personal Data Protection) Act), which increase compliance costs and legal risks related to the collection, storage, and processing of sensitive customer data.

• Integration Complexity: Overcoming the ongoing challenge of seamlessly integrating loyalty programs with fragmented enterprise technology stacks (CRM, ERP, POS systems) across various customer touchpoints.

Financial Overview of Capillary Technologies India IPO

The revenue from operations has demonstrated robust growth, driven by expansion in the high-growth North American market and strategic inorganic acquisitions. Revenue increased from Rs 255.37 crores in Fiscal 2023 to Rs 525.10 crores in Fiscal 2024, and further to Rs 598.25 crores in Fiscal 2025, achieving a CAGR of approximately 53.06% from FY23 to FY25. This strong top-line momentum continued into the latest period, reaching Rs 359.21 crores for the six months ended September 30, 2025.

The Annual Recurring Revenue (ARR) reflects the strength and predictability of the company's subscription-based model. ARR has shown consistent year-on-year expansion, growing from Rs 253.60 crores in Fiscal 2023 to Rs 608.33 crores in Fiscal 2025, reaching Rs 720.07 crores by September 30, 2025, demonstrating strong demand for its cloud-native solutions.

In the Operating Efficiency part, core business profitability is seen through increasing margins derived from leveraging its scalable technology platform and successful post-acquisition integration strategies.

Adjusted EBITDA successfully transitioned from an operating loss of Rs 6.21 crores in Fiscal 2023 and Rs 1.12 crores in Fiscal 2024 to achieve a substantial profit of Rs 74.50 crores in Fiscal 2025. The Adjusted EBITDA Margin (Net Revenue) recovered strongly from -3.00% in Fiscal 2023 to a positive 12.45% in Fiscal 2025, reflecting significant operational leverage, with margins at 11.43% for the six months ended September 30, 2025.

Profit After Tax has demonstrated a critical turnaround. Net losses were significantly reduced from Rs 87.71 crores in Fiscal 2023 and Rs 59.37 crores in Fiscal 2024, before achieving net profitability of Rs 13.28 crores in Fiscal 2025. This turnaround confirms the financial effectiveness of the strategic shift toward high-margin enterprise clients and cost optimisation.

The Return on Net Worth (RoNW) tracks the efficiency of capital usage. RoNW has shown a sharp reversal from deep negative levels of -135.93% in Fiscal 2023 and -21.52% in Fiscal 2024 to a positive 2.85% in Fiscal 2025, reflecting improved operating performance and improved capital base.

Strengths and Risks of Capillary Technologies India IPO

Let's examine the strengths and weaknesses to determine if the Capillary Technologies India IPO is a good or bad investment for investors.

Strengths

• Global Leadership in AI-Led Loyalty Solutions: Capillary Technologies is recognised as a global leader featured by Forrester, Gartner, and Zinnov in the loyalty management and CRM industry. The company offers an end-to-end suite of cloud-native, AI-powered products (Loyalty+, Engage+, Insights+, Rewards+, and CDP) that enable enterprises to run sophisticated loyalty programs and derive deep consumer insights across 47 countries.

• Customer Stickiness and High Net Revenue Retention (NRR): The company maintains strong, long-term relationships with marquee enterprise clients, including 19 Global Fortune 500 companies. This deep integration leads to high customer stickiness, demonstrated by a strong NRR of 121.25% in Fiscal 2025 and a negligible churn rate (5.98% in FY25).

• Proven Playbook for Strategic Inorganic Growth: Capillary has a successful M&A strategy focused on CAC substitution, exemplified by the acquisitions of Persuade Group, Brierley+Partners, and Kognitiv. This approach allows the company to acquire enterprise clients and revenue, subsequently migrating them to the scalable Capillary platform to enhance margins and achieve operational synergies.

• Scalable, Cloud-Native Infrastructure Handling Massive Scale: The platform is built on an API-first, cloud-based architecture that is compliant with global standards such as ISO 27001, PCI DSS, and SOC2. This scalable infrastructure efficiently manages over 1.82 billion consumers and can process up to 0.16 million loyalty transactions per hour as of Sep 30, 2025, positioning it well for global growth.

• Strong Financial Momentum with Margin Turnaround: The company successfully shifted its financial trajectory, moving from substantial net losses in Fiscal 2023 and Fiscal 2024 to achieving a net profit of Rs 13.280 crores in Fiscal 2025. This profitability turnaround is supported by an Adjusted EBITDA Margin (Net Revenue) expansion to 12.45% in Fiscal 2025, reflecting improved operating efficiency and cost optimization.

Risks

• Revenue Concentration and Dependency on Few Key Clients: The company faces material revenue concentration risk, with the top 5 customers contributing 38.60% and the top 10 customers contributing 55.70% of the revenue from operations in the six months ended September 30, 2025. Loss of any major client could severely impact revenue visibility and cash flows.

• Geographic Concentration in North America: The Company derives a majority of its revenue from the North American market, which accounted for 56.01% of revenue from operations in the six months ended September 30, 2025. This reliance exposes the business to regional economic downturns, adverse changes in data privacy laws, and geopolitical risks.

• Past Financial Instability and Negative Cash Flows: The Company reported significant net losses in the recent past (Rs 59.37 crores in FY24 and Rs 87.71 crores in FY23) and has experienced negative cash flows from operating activities (Rs 46.19 crores in FY25), indicating potential volatility and uncertainty regarding future sustained profitability.

• Acquisition and Integration Risk for Unidentified Targets: A portion of the IPO proceeds is allocated to funding unidentified acquisitions, carrying the inherent risk that suitable targets may not be identified or, if acquired, may fail to be successfully integrated, perform below expectations, or be subject to unforeseen liabilities.

• Operational Dependence on Third-Party Cloud Providers: The business is heavily reliant on a single or a few external cloud and data center providers to host its platform and manage customer data. Any interruption in service or significant cost increase from these vendors could impair service delivery, increase operating costs, such as the agreed-upon annual commitments, and harm the company’s reputation.

Strategies of Capillary Technologies India IPO 

• Focus on Larger Enterprises and North American Expansion: Direct the sales and go-to-market strategy toward acquiring and expanding penetration within enterprise customers. The primary geographical focus will be on strengthening the footprint in the United States through enhanced partnerships with system integrators.

• Drive Revenue Growth from Existing Clients: Maximise Net Revenue Retention (NRR) through cross-selling the full product suite and monetising increased platform usage, such as transaction or member-based fees. This strategy aims to expand the value derived from current customers by introducing additional product offerings, new brands, and geographic coverage.

• Pursue Value-Driven Inorganic Growth: Execute strategic acquisitions in North America and other evolved markets like Europe to achieve CAC substitution, acquire key technology, and secure high-value enterprise customer relationships, followed by a disciplined post-merger integration for margin improvement.

• Invest Heavily in AI and R&D for Product Leadership: Utilise IPO proceeds for sustained R&D investment to enhance the core platform. Focus areas include developing generative loyalty features, advancing the AI engine (aiRA), creating next-generation CDP tools, and ensuring industry-specific customisation.

• Drive Expansion through New Vertical-Specific Solutions: Expand the market reach by developing and tailoring solutions for high-growth verticals beyond traditional retail, focusing on sectors such as healthcare, BFSI, telecommunications, and energy retail, leveraging existing domain expertise and acquired customer bases.

Capillary Technologies India IPO vs. Peers

Capillary Technologies India Limited operates within the highly competitive global Loyalty and Customer Relationship Management (CRM) SaaS market, which, as per the Red Herring Prospectus (RHP), currently has no listed peers in India of comparable size or business model.

Given this limitation, the competitive assessment and valuation context is established against major globally listed SaaS providers whose offerings overlap with Capillary's core business in customer engagement, marketing technology, and cloud solutions.

The table below shows the return on net worth for Capillary Technologies compared against its global peers:

Note: The financial metrics, such as Return on Net Worth (RoNW), vary based on the financial year-end of reporting in their respective countries, which often do not align with the company's March 31 fiscal year-end. This, along with variations in accounting principles (Ind AS vs. US GAAP/IFRS), should be considered when evaluating these comparative ratios.

The company showcases a robust and unique position in the global SaaS loyalty market. Capillary Technologies' fiscal 2025 revenue from operations of Rs 598.25 crores (approximately USD 71.3 million) establishes it as a rapidly scaling player.

Capillary's differentiation lies in its explicit focus on end-to-end AI-led loyalty and engagement, standing out from its peers who integrate loyalty as a module within larger CRM or marketing clouds.

Note: There are no listed Indian peers for Capillary Technologies. The information above is provided solely for competitive and contextual purposes, using publicly available consolidated financial data from listed global entities, as disclosed in the Red Herring Prospectus.

Objectives of Capillary Technologies India IPO

The offering consists of a total of 1,52,07,998 shares worth Rs 877.50 crores, out of which the offer for sale of 92,28,796 shares is valued at Rs 532.50 crores, and the fresh issue of 59,79,202 shares is valued at Rs 345 crores, respectively. The selling shareholders in this IPO are:

Capillary Technologies International Pte. Ltd and Trudy Holdings will receive the offer for sale proceeds.

However, the fresh issue proceeds will be used for the following objectives:

• Funding Cost for cloud infrastructure (Rs 143 crores)

• Investment in research, designing, and development of products and platforms (Rs 71.58 crores)

• Investment in the purchase of computer systems for the business (Rs 10.34 crores)

• Unidentified Inorganic Acquisitions and General Corporate Purposes (Rs 120.08 crores)

Capillary Technologies India IPO Details

IPO Dates

Capillary Technologies India IPO will be open for subscription from November 14, 2025, to November 18, 2025. The allotment of shares to investors will take place on November 19, 2025, and the company is expected to be listed on the NSE and BSE on November 21, 2025.

IPO Issue Price

Capillary Technologies India is offering its shares in the price band of Rs 549 to Rs 577 per share. This means you would require an investment of Rs. 14,425 per lot (25 shares) if you are bidding for the IPO at the upper price band.

IPO Size

Capillary Technologies India is issuing a total number of 1,52,07,998 shares valued at Rs 877.50 crores, out of which the offer for sale comprises 92,28,796 shares, worth Rs 532.50 crores, of which the selling shareholders will receive the proceeds. The remaining 59,79,202 shares worth Rs 345 crores will be of fresh issue, used for the objects of the issue.

IPO Allotment Status

Investors who applied for the IPO can check their IPO allotment status on November 19, 2025, through the registrar's website, MUFG Intime India Private Limited, BSE, NSE, or through the stockbroker platform.

IPO Listing Date

The shares of Capillary Technologies India are expected to be listed on the NSE and BSE on November 21, 2025.

IPO Application Link

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