Capillary Technologies India Ltd IPO 

Last Updated on October 17, 2023 by BFSLTeam BFSLTeam

Capillary Technologies India Ltd is a pioneering digital enterprise specialising in AI-driven cloud-native Software-as-a-Service (SaaS) solutions. It provides a range of AI-powered SaaS products, including loyalty management and customer data platforms, designed to help businesses create customised loyalty initiatives for consumers and distribution partners.

Capillary Technologies India Ltd IPO will comprise both a fresh issue as well as an Offer for Sale of equity shares worth Rs. 200 crore and Rs. 650 crore, respectively. The company issued its DRHP with market regulator SEBI and has received the green light to launch its IPO. 

Learn about the company and its financials in detail before making an investment decision. 

About Capillary Technologies India Ltd

Capillary Technologies is a technology-first company specialising in cloud-native AI-based Software-as-a-Service (SaaS) products. Its offerings such as automated loyalty management services and customer data platforms (CDPs) cater to large enterprise customers generating annual revenues of over Rs. 3.5 crore. 

The company’s diverse product suite and advanced technology enable clients to run complex loyalty programs, gain comprehensive consumer insights and implement unified strategies across channels for personalised experiences in real-time. Capillary’s platform is used in multiple industries, including hospitality, retail, fuel, CPG, aviation, conglomerates and more.

With a 39% share in loyalty management market in the Asia-Pacific region (excluding employee loyalty), the company is taking several steps to expand its global outreach. It recently entered the United States market with the acquisition of Persuade Group in September 2021. To date, the company has served more than 250 brands in 30 countries.

With eight patents and 38 trademarks, the company’s platform powered by Artificial Intelligence and Machine Learning is designed to enable seamless identification, customer engagement and retention across mobile channels. 

This innovative approach is in line with the trend of 76% of shoppers using mobile phones to shop and highlights the importance of mobile apps to support loyalty initiatives.

Company Financials 

The following table lays down some crucial financial details of Capillary Technologies:

Parameters as Per the Year Ending On	March 31 2021	March 31 2020	March 31 2019
Total Assets	815.95	861.90	711.43
Total Liabilities	490.99	742.60	645.22
Total Expenses	1,062.17	1,673.93	1,866.14
Total Revenue	1,231.57	1,675.99	1,749.46
Profit After Tax	169.40	2.06	(116.68)
EBITDA	222.25	83.98	(17.13)
Earnings Per Share (EPS) (Basic & Diluted) *	3.54	0.04	(2.44)

*All values are in Rs. millions except EPS 

Other important details such as Capillary Technologies India Ltd IPO price, lot size, subscription date, and more are yet to be announced. 

Also Read: IPO grading

Strengths of Capillary Technologies India Ltd

Here are some of the unique facts stating the strengths of Capillary Technologies Ltd: 

• The company is a dominant force in consumer engagement and loyalty management in Asia, boasting a 39% market share in loyalty management as of 2020.
• With the acquisition of Persuade Group, this company has built a significant presence in the US and employed 37 people as of October 31, 2021. Persuade Group has served major Fortune 100 and Fortune 500 clients such as Scheels and Hoya Vision.
• Founded by John Tschida and Bill Jansen, Persuade Group has seen strong revenue growth, increasing from Rs. 84.66 million in FY19 to Rs. 246.41 million in FY2021. This synergy between the company’s technology-driven approach and Persuade Group’s expertise allows Capillary Technologies to expand in the United States.
• The company is the only Asian representative in the Forrester NowTech Loyalty Report. It was recognised as the best supplier of hybrid loyalty solutions according to Zinnov’s report. It has also received recognition in various reports from leading analysts Gartner and Forrester, who specialise in large enterprises.

Also Read: How is an IPO valued?

Risks Involved 

Along with the strengths, there are also several underlying risks that pose a threat to the company’s growth and financials. Here are a few of them:

• As the market for the company’s solutions matures, potential pricing pressure may arise due to new offerings from competitors or changes in customer preferences. This could lead to problems in renewing agreements with existing clients or attracting new ones.
• The company generates a substantial part of its income from a few customers. Any loss or reduction in business from these clients could materially affect its financial stability, affecting its cash flows and business.

Summary 

The company might also consider a pre-placement which will result in a reduction of fresh issue size of Capillary Technologies India Ltd IPO. Capillary Technologies aims to utilise the proceeds from its IPO towards product development, debt payment, and other growth initiatives.

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