India’s Fractal Analytics Is Investing Heavily in AI R&D Ahead of Its IPO

Fractal Analytics, an enterprise-AI company based in New York and Mumbai, is prioritising research and development spending as it prepares to go public. The firm spent ₹1.44 billion (about US$16.6 million) on R&D in 2025, reflecting its commitment to staying at the cutting edge of AI. Over the past three years, its R&D spend has averaged approximately 6 percent of revenue.

The company’s CEO, Srikanth Velamakanni, emphasised that strong investment in R&D is essential for Fractal’s survival and credibility in a highly competitive AI landscape. “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?” he said.

Fractal plans to raise ₹4,900 crore (around US$554 million) in its IPO, combining fresh capital with a sale by existing investors. The company is still awaiting final approval from India’s securities regulator before proceeding.

A significant portion of Fractal’s revenue—more than 65 percent—comes from U.S. clients, including major tech companies. Despite this global exposure, the firm says it is focused on using its IPO to strengthen its R&D capabilities as well as scale its AI services business.

Analysis / Impact:
Fractal’s aggressive R&D spending ahead of its IPO signals a major bet: it isn’t just aiming to be an AI service provider, but a technology leader. By investing now, the company hopes to differentiate itself amid a surge of global demand for data-driven AI solutions.

This move could set a template for other Indian AI firms. If Fractal’s IPO is successful, it may encourage more domestic players to scale up their R&D budgets, potentially accelerating India’s role in the global AI race. For investors, Fractal’s strategy underscores that the next wave of AI growth will not be won on sales alone—but on innovation.