Fractal Industries Ltd. IPO

Fractal Industries

• Fractal Industries is coming out with an initial public offering (IPO) of 22,68,600 shares in a price band of Rs 205-216 per equity share.
• The issue will open on February 16, 2026 and will close on February 18, 2026.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 20.50 times of its face value on the lower side and 21.60 times on the higher side.
• Book running lead manager to the issue is Finaax Capital Advisors.
• Compliance Officer for the issue is Kruti Parshwa Shah.

Profile of the company

The company is engaged in the business of designing, sourcing and manufacturing of garments and providing end-to-end warehousing and supply chain services to e-commerce platforms. Having Pan India presence, the company is a full-service garment manufacturing and technology-driven supply chain management company focused on fast-moving, high-quality apparel for e-commerce marketplaces (Myntra, Ajio and similar platforms). It integrates agile design-to-delivery manufacturing, scalable production capabilities, rigorous quality control, and data-driven supply chain management to help brands and private labels accelerate speed-to-market, improve margins, and enhance customer satisfaction.

It also provides integrated supply chain and fulfillment solutions that enable apparel brands, partners, and marketplaces to optimize and streamline their e-commerce operations. It also offers a wide array of value-added services to enhance e-commerce operations including Product Management System, Data Analytics, Integrated Logistics Management, Order Management System, Inventory and Returns Management, Order Anomaly Detection, Multi-Channel Sales Enablement.

Its manufacturing unit is located at Mumbai with warehouses located in Gujarat, Maharashtra, Haryana, West Bengal and Karnataka. The company also offers a wide array of value-added services to enhance e-commerce operations including Product Management System, Data Analytics, Integrated Logistics Management, Order Management System, Inventory and Returns Management, Order Anomaly Detection, Multi-Channel Sales Enablement.

Proceed is being used for:

• Funding working capital requirements
• General corporate purposes

Industry Overview

The Indian supply chain industry forms a critical backbone of the nation’s economy, enabling the seamless movement of raw materials, semi-finished goods, and final products across diverse sectors including FMCG, automotive, retail, ecommerce, pharmaceuticals, and industrial manufacturing. It encompasses end-to-end functions such as procurement, warehousing, inventory management, logistics, transportation, and last-mile delivery-integrating both traditional distribution networks and emerging digital supply chain models. The industry plays a pivotal role in supporting India’s manufacturing, trade, and consumption ecosystems, contributing significantly to GDP, employment, and export competitiveness.

The Indian Supply Chain Management market, estimated at $2.38 billion in 2024 and projected to reach $6.83 billion by 2034 at a CAGR of 11.11%, demonstrates robust growth potential over the forecast period. The high CAGR reflects strong demand for efficient, technology-driven supply chain solutions, driven by the rapid expansion of ecommerce, organized retail, and industrial sectors in India. Increasing adoption of automation, warehouse management systems, logistics tracking, and AI-based forecasting is enhancing operational efficiency and reducing costs, further supporting market expansion. Overall, the sector presents significant opportunities for domestic and international players to invest in scalable, tech-enabled supply chain solutions to cater to a rapidly evolving market landscape.

The Indian apparel industry is a rapidly growing and diverse sector, encompassing traditional textiles, mass-market clothing, and premium fashion. Growth is driven by rising disposable incomes, urbanization, increasing fashion consciousness, and the expansion of both organized retail and e-commerce channels. India’s industry benefits from a strong manufacturing base, skilled labour, and a rich heritage of textiles, while trends in sustainable and technologically advanced apparel are shaping its future growth trajectory. The Indian apparel market, estimated at $110.09 billion in 2024 and projected to reach $161.82 billion by 2034 at a CAGR of 3.93%, reflects steady and sustained growth over the forecast period.

Pros and strengths

Technologically advanced and integrated Warehouse Management System: Its warehousing capabilities are managed through a state-of-the-art Warehouse Management System (WMS). Its WMS provides granular, real-time visibility of every item, from a single button in its raw material store to a packed carton of finished goods ready for dispatch. This enables precise inventory control, minimizes the risk of stockouts, and reduces inventory carrying costs. The system automates and optimizes key warehouse processes, including inwarding, quality checks, binning, picking, and packing. The use of barcode has enabled it to achieve optimum process accuracy rate and has significantly reduced order fulfilment times.

Expertise in apparel reverse logistics (Returns Management): E-commerce fashion sees return rates as high as 30-40% driven by the factors like poor fit, product expectation mismatch, colour issues. Its ability to efficiently manage this complex reverse flow is a major competitive strength. It operates a specialized returns processing workflow where returned items undergo a rigorous inspection to assess their condition. Items are graded (e.g., A-grade (Like New), B-grade (Very Good)), and where possible, are refurbished through services like steaming, pressing, stain removal, and minor repairs to maximize the recovery of their value. Its efficient processes ensure that saleable returned products are made available for purchase on e-commerce platforms within [e.g., 24-48] hours of receipt, minimizing lost sales opportunities for its clients.

Quality control and inspection: A key strength of its business lies in its strong Quality Control (QC) systems, which are embedded across every stage of the garment manufacturing and warehouse management process. Its emphasis on quality ensures that it consistently delivers products that meet the stringent requirements of online marketplaces. It has established multi-level quality checkpoints covering Raw Materials, Work-in-Progress, Finished Goods and Warehouse Quality Checks. Its dedicated Quality Assurance team is trained in both manual and automated testing techniques, supported by advanced equipment and digital tracking systems. 

Risks and concerns

Dependence on a few key customers: The company depends on certain customers who have contributed a substantial portion of its total revenues. Revenue from the top five customers contributed 99.79%, 100.00%, 99.76%, and 100.00% of total revenue from operations for the period ended September 30, 2025, the financial year ended March 31, 2025, and the financial years ended March 31, 2024 and March 31, 2023, respectively. The company relies on a limited number of customers for its sales, and the loss of any major customer could adversely impact its revenue and profitability.

Dependence on online marketplace: Its business model is significantly dependent on sales through online marketplaces, as well as on the efficient management of its warehousing and distribution facilities. Any disruption, inefficiency, or change in the operations or policies of these marketplaces, or any shortcomings in its warehouse management, may materially and adversely affect its business, results of operations, and financial condition. A substantial portion of its revenue is derived from sales made through third-party online marketplaces. It relies on these platforms for access to a large customer base, digital visibility, and order fulfillment support. Any adverse change in their policies relating to commission structures, listing fees, delivery timelines, returns, or promotional requirements could increase its operational costs or reduce its profit margins.

Volatility in raw material costs: Its operations are significantly dependent on the availability and cost of raw materials such as fabrics other accessories. The prices of these raw materials are subject to volatility due to factors beyond its control, including global commodity price trends, changes in supply-demand dynamics, climatic conditions, government policies, trade restrictions, and currency exchange rate fluctuations. The company relies on third-party suppliers for sourcing the raw materials necessary for manufacturing it products. It is exposed to price fluctuations and potential unavailability of these raw materials, particularly as it generally does not enter into long-term supply agreements with its suppliers. A significant portion of its requirements is met through the spot market, leaving it unable to control the factors influencing the cost of raw materials.

Outlook

Fractal Industries is engaged in the business of designing, sourcing and manufacturing of garments and providing end-to-end warehousing and supply chain services to e-commerce platforms. By combining manufacturing excellence with technology-enabled fulfilment capabilities, it has positioned itself as a preferred partner for both brand owners and online marketplaces seeking to streamline their retail operations. On the concern side, its business is highly dependent on the smooth functioning of its supply chain and logistics network, which plays a critical role in ensuring timely procurement of raw materials and delivery of finished goods. Any disruption or inefficiency in its supply chain and logistics operations could materially and adversely affect its business, financial condition, and results of operations. It relies on a wide network of suppliers, transporters and logistics partners for sourcing fabrics, accessories, and other inputs required in its manufacturing process, as well as for the distribution of its finished products to customers and marketplaces. Any delay, shortage, or quality issue in the supply of raw materials, or any disruption in transportation due to factors such as strikes, accidents, natural calamities, regulatory restrictions, or infrastructure constraints, could delay its production schedules and impact timely order fulfillment.

The company is coming out with a maiden IPO of 22,68,600 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 205-216 per equity share. The aggregate size of the offer is around Rs 46.51 crore to Rs 49.00 crore based on lower and upper price band respectively. On performance front, the total income of the company for fiscal year 2025 was Rs 8,551.29 lakh against Rs 5,000.85 lakh of total income for Fiscal year 2024 with an increase of 71% in total income. Profit after tax for the Fiscal 2025 were at Rs 753.76 lakh against profit after tax of Rs 226.68 lakh in fiscal 2024, An Increase of 232.52%.

Going forward, the company’s core business strategy is to focus on consistently meeting and exceeding quality standards across its garment manufacturing and warehouse management operations. It ensures procurement of fabrics, trims, and accessories only from vetted and certified suppliers. Regular training is provided to operators and supervisors to minimize defects and maintain precision in stitching, cutting, and finishing. Its focus is to carry out rigorous inbound and outbound quality checks to ensure only defect-free products reach customers. By embedding quality as a non-negotiable pillar of growth, the company aims to strengthen its reputation, build long-term customer trust, and maintain a competitive edge in domestic market. Further, the company aims to expand its market presence across India by penetrating high-potential regions, enhancing distribution networks, and establishing a strong online footprint. The company will focus on maximizing the reach and customer base through its existing online marketplace partners.