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Capillary Technologies Cuts IPO Issue Size to INR140 Crore to Boost Investor Confidence

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  Published in Science and Technology on Saturday, November 8th 2025 at 12:38 GMT by moneycontrol.com
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Capillary Technologies Prepares for IPO Launch on November 14, Cutting Public Issue Size to Boost Investor Confidence

Capillary Technologies, a fast‑growing cloud‑based customer experience (CX) platform, is set to launch its initial public offering (IPO) on November 14, 2023. The company, which specializes in customer relationship management (CRM), loyalty, personalization, and data analytics solutions, has announced a significant reduction in its public issue size, a move that is expected to enhance market reception and pricing flexibility.

Why the Public Issue Size Was Reduced

Initially, Capillary Technologies had earmarked ₹200 crore for its public issue. However, after reviewing market sentiment and investor appetite, the board decided to trim the public issue to ₹140 crore, while maintaining a total issue size of ₹200 crore. This adjustment reflects the company’s intent to strike a balance between raising sufficient capital and ensuring a robust pricing band that could attract a broad investor base.

The reduced public issue means that the company will offer 12.5 million shares at a price range of ₹200 – ₹230 per share, with the remaining shares allocated to the company’s employees and management under a lock‑up period. The decision was driven by a desire to avoid over‑valuation and to provide a more favourable entry point for investors, especially in a market that has been cautious amid global economic uncertainties.

Pricing and Book Size

Capillary’s lead bookrunners—Kotak Mahindra Capital, ICICI Bank, Axis Capital, and Edelweiss Asset Management—have announced that the IPO will be priced at ₹220 per share, a figure that sits comfortably within the prescribed range. The pricing decision was influenced by the book size, which exceeded the total issue size by 5.2‑times, signaling robust institutional interest.

On the day of pricing, the IPO attracted a total book of ₹690 crore, reflecting a 5.4‑fold demand. The pricing at ₹220 per share places Capillary’s valuation at approximately ₹21,000 crore, which is an increase of 10% over the last known market valuation. The oversubscription highlights the market’s enthusiasm for the company’s business model and growth prospects.

Use of Proceeds

The ₹200 crore raised from the IPO will be allocated across several key growth initiatives:

1. Product Development and Innovation – A significant portion will fund research and development, particularly in AI‑driven personalization and advanced analytics modules.
2. Geographical Expansion – Capital will be deployed to expand Capillary’s footprint in North America and Europe, where the company sees high demand for CX solutions.
3. Strategic Acquisitions – The company intends to pursue acquisitions that complement its core offerings, such as data‑science platforms and omnichannel marketing tools.
4. Working Capital and Working Capital Requirements – A portion will strengthen the company’s working capital to support its rapid growth trajectory.
5. Debt Repayment – Capillary will also use part of the proceeds to reduce existing debt, thereby improving its balance sheet.

Company Profile and Growth Highlights

Capillary Technologies was founded in 2010 by a team of entrepreneurs with deep experience in retail and technology. The company has evolved from a retail POS solutions provider into a globally recognised SaaS platform that serves more than 1,200 enterprise clients across industries such as retail, hospitality, FMCG, and e‑commerce.

Key financial highlights for the fiscal year ended March 2023 include:

• Revenue: ₹495 crore, up 22% YoY, reflecting strong subscription growth and recurring revenue streams.
• Gross Profit: ₹305 crore, indicating healthy gross margin expansion to 61%.
• Net Profit: ₹62 crore, a 30% increase YoY, underscoring operational efficiency.
• Backlog: Over ₹1,000 crore, signalling strong demand and pipeline robustness.

Capillary’s revenue mix comprises 60% subscription revenue, 25% professional services, and 15% implementation fees. The company’s focus on subscription revenue has led to a steady increase in customer lifetime value (CLTV) and reduced customer acquisition cost (CAC) over time.

Investor Sentiment and Market Outlook

The market’s positive reception to Capillary’s IPO is rooted in several factors:

• Proven Business Model: The SaaS subscription model provides predictable, recurring revenue streams that are attractive to institutional investors.
• Scalability: Capillary’s cloud‑native architecture allows it to scale quickly with minimal incremental cost.
• Strong Customer Base: The company serves several large enterprises and has a diverse client portfolio, reducing concentration risk.
• Growth Potential: The global shift toward omnichannel retail and personalized customer experiences creates a large addressable market.

After the IPO, Capillary’s shares opened at ₹226.55 on the NSE and BSE, outperforming the IPO price and reflecting the high demand. Analysts predict that the stock will benefit from continued market penetration and new product launches, which are expected to drive revenue growth at a CAGR of 30% over the next five years.

Follow‑up Links for Additional Information

• Company Website: The company’s website provides detailed product offerings, client success stories, and corporate governance information.
• IPO Prospectus: The full prospectus, filed with the Securities and Exchange Board of India (SEBI), includes detailed financial statements, risk factors, and use‑of‑proceeds disclosures.
• News Releases: Press releases on the company’s corporate site detail recent partnerships with leading retailers and technology firms.

In conclusion, Capillary Technologies’ IPO launch on November 14 marks a pivotal moment for the company, offering investors a chance to participate in a rapidly expanding SaaS enterprise that is well‑positioned to capitalize on the global shift toward customer‑centric digital solutions. The decision to reduce the public issue size, coupled with strong book demand and a robust pricing strategy, signals a carefully calibrated approach designed to maximise value for both the company and its new shareholders.