Capillary Technologies India IPO: Should you subscribe?

Summary: Capillary Technologies India, a leading player in the SaaS solutions provider space, is set to go public on November 14, 2025. Here, we analyse the company’s past track record, strengths and weaknesses to help you better decide whether its IPO is worth subscribing to.

Capillary Technologies India, a SaaS (Software as a Service) solutions provider, will open its IPO (initial public offering) on November 14, 2025 and close on November 18, 2025. Of the total issue size of Rs 878 crore, Rs 345 crore comprises a fresh issue, while Rs 533 crore will be an offer for sale (OFS).

Here, we break down Capillary Technologies India’s business, financials, strengths, risks and valuation to help you make an informed investment decision.

What the company does

Capillary Technologies is a global SaaS company specialising in AI-driven loyalty and engagement solutions for large enterprises. Its end-to-end product suite helps brands run comprehensive loyalty programmes, personalise customer journeys and drive repeat sales.

Headquartered in India, Capillary serves over 410 brands across 47 countries through its cloud-native platforms.

Track record and valuation

Capillary Technologies India’s financials have proven to be a mixed bag. Although the company managed to increase revenue by 53 per cent every year between FY23 and FY25, PAT (profit after tax) and EBIT (earnings before interest and tax) remained negative, turning positive only in FY25. On the bright side, Capillary Technologies India managed to reduce its total debt, which fell by nearly 16 per cent during the same period.

At the upper end of the price band (Rs 577), Capillary Technologies India’s stock is expected to be valued at 180 times its TTM (trailing twelve months) earnings and around 4.9 times its book value. It has no listed Indian peers for comparison.

The good

Below are some of the key strengths of Capillary Technologies India.

#1 A leading player in the SaaS solutions provider space

Capillary Technologies offers a full suite of AI-led SaaS products for CRM and loyalty management. Its integrated platforms enable enterprises to run end-to-end loyalty programmes using unified data and AI-driven engagement. This holistic approach helps brands strengthen customer relationships, improve retention and drive revenue. The company’s value-rich features create strong exit barriers, reflected in healthy net revenue retention rates and low churn.

Further, Capillary’s scale continues to expand, with the number of consumers hosted on its platform reaching 1.82 billion as of September 2025.

#2 High net revenue retention

Capillary Technologies serves a wide mix of industries, from retail and apparel to travel, auto, consumer goods and healthcare, giving it a well-diversified customer base. Its top five and 10 clients contribute meaningfully to revenue, supported by strong cross-selling and up-selling opportunities.

The company maintains long-term partnerships, with most contracts renewed annually or structured for 3-10 years. High retention and expanding relationships are reflected in robust net revenue retention rates (NRR), underscoring Capillary’s ability to grow alongside its clients.

The bad

Here are some of the challenges faced by Capillary Technologies India.

#1 Revenue concentrated within a handful of customers

Capillary Technologies India remains dependent on a concentrated set of clients, particularly from North America. Its top five and top 10 customers contributed early 39 per cent and 56 per cent of revenue, respectively, in the six months ended September 2025. In FY25, this reliance was even higher at 43 per cent and 59 per cent. Therefore, any loss, scale-down or non-renewal of business from these key customers could materially affect Capillary’s revenue, profitability and cash flows.

#2 Dependency on a handful of sectors

Capillary Technologies also derives most of its revenue from a few key sectors: retail, healthcare, BFSI and telecom, which together contributed around 64 per cent of revenue in recent periods. This dependence exposes the company to sector-specific risks. Any slowdown in these industries or reduced spending on loyalty and CRM solutions could weaken revenue visibility and impact overall business performance and cash flows.

Where will the IPO proceeds go?

Of the fresh issue proceeds of Rs 345 crore, Capillary Technologies India aims to utilise Rs 143 crore towards funding its cloud infrastructure costs. Another Rs 72 crore will be earmarked for investment in the research, design and development of the company’s products and platform, while around Rs 103 crore will be used for buying new computer systems.

The remaining funds, if any, will be allocated towards funding inorganic growth and general corporate purposes.

So, should you subscribe to the Capillary Technologies IPO?

Capillary Technologies may be a notable name in India’s SaaS landscape, but its subdued profitability and reliance on a concentrated set of clients and sectors pose risks.

At Value Research Stock Advisor, we guide you toward companies with a solid, proven track record. So that you avoid chasing every IPO and instead back businesses that grow steadily and help you build long-term wealth.

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