Capillary Technologies Files for IPO, Plans to Raise Rs 345 Crore Starting November 14

Capillary Technologies, a software-as-a-service (SaaS) provider specializing in artificial intelligence (AI)-based cloud-native solutions, has officially filed its Red Herring Prospectus (RHP) for its maiden public issue.\n\nThe IPO is scheduled to open for subscription on November 14, 2023, and will remain open until November 18, 2023. The anchor book, which allows institutional investors to subscribe a day prior, will open on November 13. The company anticipates finalising share allotment by November 19, with trading on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) expected to commence on November 21.\n\nCapillary Technologies plans to raise approximately Rs 345 crore through the issuance of new shares. Additionally, promoter Capillary Technologies International and investor Trudy Holdings will offload over 92.28 lakh equity shares through an Offer for Sale (OFS). This represents a reduction from the previously proposed Rs 430 crore fresh issue mentioned in an earlier draft filing.\n\nThe raised capital is earmarked for strategic purposes: Rs 143 crore for cloud infrastructure, Rs 71.6 crore for research, designing, and development of products and platforms, and Rs 10.3 crore for purchasing computer systems. The remaining funds will be allocated to inorganic growth initiatives and general corporate purposes.\n\nFinancially, the company reported a profit of Rs 1.03 crore for the six months ending September 2025, a significant improvement from a loss of Rs 6.8 crore in the corresponding period last fiscal. Revenue grew by 25 percent to Rs 359.2 crore during the same period.\n\nCapillary Technologies operates in a domain with no direct listed Indian peers but competes globally with giants like Salesforce, Adobe, and HubSpot.\n\nImpact:\nThis IPO is significant for the Indian technology and startup ecosystem, providing investors an opportunity to invest in a growing AI-focused SaaS company. The successful listing could boost investor confidence in the sector. Rating: 7/10.\n\nDifficult Terms Explained:\nIPO (Initial Public Offering): The first time a private company offers its shares to the public, becoming a publicly traded company.\nRed Herring Prospectus (RHP): A preliminary prospectus filed with the securities regulator that contains most of the details of an upcoming IPO but may still be subject to changes.\nOffer for Sale (OFS): A method where existing shareholders (promoters or investors) sell their shares to the public, rather than the company issuing new shares.\nSaaS (Software as a Service): A software distribution model where a third-party provider hosts applications and makes them available to customers over the Internet.\nAI (Artificial Intelligence): Technology that enables machines to perform tasks that typically require human intelligence, such as learning, problem-solving, and decision-making.\nSEBI (Securities and Exchange Board of India): The regulatory body responsible for overseeing the securities market in India.\nCloud-native: Applications designed specifically to run in a cloud computing environment, taking advantage of its features like scalability and flexibility.\nPromoter: The person or entity that initiates the formation of a company and holds a significant stake, usually playing a key role in its management.