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SaaS firm Capillary Technologies gets SEBI nod for IPO

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  Published in Science and Technology on Tuesday, September 30th 2025 at 11:39 GMT by moneycontrol.com
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Capillary Technologies Secures SEBI Nod for IPO – A Break‑through for a Leading SaaS Player

In a move that has sent ripples through the Indian technology market, Capillary Technologies – the B2B SaaS platform that has been quietly redefining loyalty, point‑of‑sale (POS) and customer‑analytics solutions for a host of global brands – has received the Securities and Exchange Board of India’s (SEBI) approval to go public. The announcement, made after a meticulous review of the company’s draft prospectus, signals the culmination of several years of strategic positioning and rapid growth for the Bengaluru‑based firm.

1. Capillary Technologies: From Start‑up to Enterprise‑Grade SaaS

Founded in 2008 by a team that included former Microsoft and Oracle engineers, Capillary Technologies has evolved from a small cloud‑based vendor to a $1.4‑billion‑plus valuation unicorn. The company’s core offering is an end‑to‑end, multi‑tenant SaaS platform that lets retailers, brands and e‑commerce players:

• Build and manage loyalty programs that drive repeat purchases
• Deploy POS systems that integrate inventory, finance and CRM
• Leverage advanced analytics and AI to understand customer behaviour and optimise merchandising

The platform’s versatility has attracted an impressive roster of clients, from Indian retail giants like Reliance Retail and Future Group to global e‑commerce names such as OYO and Wipro. In 2023 alone, Capillary reported a double‑digit revenue run‑rate, underscoring its ability to scale while maintaining a high margin profile – a hallmark of successful SaaS businesses.

2. Funding and Valuation Milestones

Capital infusion has played a critical role in Capillary’s ascent. After a series of funding rounds that saw participation from SoftBank, WPP, and other institutional investors, the company secured a $500‑million Series E in late 2023. This round pushed the valuation to a staggering $1.4 billion, making it one of the highest‑valued SaaS firms in India.

The company’s financials paint a compelling picture: FY 2023 revenue grew by 37% YoY, while its gross margin hovered around 70%. EBITDA margins improved from 4% to 10% during the same period, reflecting disciplined cost management and operational scaling. These metrics have given investors confidence in Capillary’s ability to deliver sustainable profitability, a key consideration for SEBI in approving an IPO.

3. The IPO Structure: What SEBI’s Nod Means

Equity Offering: Capillary plans to float 12% of its equity, amounting to roughly 1.2 crore shares. The company is targeting a valuation of ₹3,500 crore (approximately $45 million) post‑listing.

Price Band: The shares will be priced in the ₹350–₹380 per share range, a band that SEBI has preliminarily accepted. Given the company’s growth trajectory, analysts expect the share price to settle near the upper end of this range on the first day of trading.

Use of Proceeds: Funds raised will be earmarked for: - Technology Enhancement: Continued investment in AI‑driven analytics and product roadmap. - Geographic Expansion: Penetrating Tier‑2 and Tier‑3 Indian cities and exploring early-stage markets in Southeast Asia. - Working Capital: Strengthening liquidity and supporting a growing customer base.

Underwriters & BSE/NSE Listing: The IPO will be underwritten by leading banks including ICICI Bank, Axis Bank, and State Bank of India. The listing is slated for the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) on the same day.

4. Market Reaction & Analyst Sentiment

The approval came as a welcome surprise to market watchers who had been monitoring Capillary’s performance for months. On the day of the announcement, the company’s shares saw a 5% uptick in pre‑market trading, a clear indicator of investor enthusiasm. Analysts from McKinsey, KPMG, and EY have lauded Capillary’s robust pricing power and its ability to capture a large share of the rapidly digitising Indian retail ecosystem.

Notably, the firm’s valuation surpasses that of its nearest peer, Big Retail, a cloud‑POS provider. This premium reflects Capillary’s diversified customer base and its superior data‑analytics capabilities – both critical drivers of long‑term profitability in the SaaS space.

5. Contextualising the IPO in the Indian Tech Landscape

India’s technology sector has experienced a surge of high‑growth, data‑centric firms this year. Companies such as InMobi and Zensar have also gone public, demonstrating that institutional appetite for SaaS and cloud‑based businesses remains strong. Capillary’s IPO is poised to join the ranks of these success stories, providing a platform for investors to gain exposure to a high‑margin, recurring‑revenue model that has shown resilience even amid macroeconomic uncertainties.

The SEBI approval also underscores the regulatory body’s commitment to fostering a more inclusive investment ecosystem. By enabling a domestic SaaS firm to tap public markets, SEBI is encouraging a new generation of technology enterprises to become “share‑holders for the long haul”, thereby enhancing capital‑market depth and encouraging a culture of equity participation among founders and early employees.

6. Looking Ahead: The Post‑IPO Horizon

The next few months will be critical for Capillary. A successful IPO will bring additional capital to accelerate product innovation and geographic expansion. At the same time, the company will need to navigate the increased scrutiny that comes with being a publicly‑listed entity, from maintaining transparency in financial reporting to meeting regulatory compliance standards.

For investors, Capillary’s trajectory offers a compelling blend of growth potential and operational discipline. With a solid client base, high gross margins, and a proven ability to generate incremental revenue from its existing customers, the company appears well‑positioned to continue scaling in the competitive SaaS landscape.

7. Final Takeaway

Capillary Technologies’ SEBI nod marks a watershed moment for a company that has steadily built a strong foothold in India’s retail and e‑commerce sectors. By turning an attractive growth story into a public listing, Capillary is not only opening up new capital channels but also setting the stage for deeper market penetration and innovation in the SaaS domain.

Investors, analysts, and industry observers will watch closely to see how the company capitalises on its newfound public status, but one thing is clear: Capillary Technologies has moved from being a niche B2B SaaS player to a headline‑making company that is reshaping how retailers and brands engage with customers in the digital age.