Fractal Industries IPO Makes Strong Debut with 6.02% Premium, Lists at ₹229 then Hits Lower Circuit Against Moderate 5.44x Subscription

Fractal Industries Ltd, a full-service garment manufacturing and supply chain company engaged in designing, sourcing, and manufacturing garments providing end-to-end warehousing and logistics services to e-commerce platforms like Myntra, Ajio, and Flipkart operating across India focused on producing fast-moving, high-quality apparel for online marketplaces through business models including Outright Sale of Garments, PPMP Model (Pure Play Marketplace) for platform in-house labels, and Direct Sale under own brand "7ate9" launched from May 2025, made a strong debut on BSE SME on Tuesday, February 24, 2026. After closing its IPO bidding between February 16-18, 2026, the company commenced trading with a premium of 6.02% opening at ₹229.00 before hitting lower circuit at ₹217.55 (up 0.72% from issue price).

Fractal Industries Listing Details

Fractal Industries launched its IPO at ₹216 per share with minimum investment of 1,200 shares costing ₹2,59,200. The IPO received moderate response with subscription of 5.44 times - individual investors at 4.09 times, NII at 7.91 times, QIB at 5.95 times, total applications of 3,280.

First-Day Trading Performance

Listing Price: Fractal Industries opened at ₹229.00 representing premium of 6.02% from issue price of ₹216.00, quickly hit lower circuit at ₹217.55 (down 5% from open, up 0.72% from issue price), with VWAP at ₹228.25, reflecting volatile market sentiment with initial gains evaporating as profit booking emerged with turnover of ₹22.69 crore, traded volume of 9.94 lakh shares, delivery of 100%, and market capitalisation of ₹170.75 crore marginally above pre-IPO market cap of ₹169.54 crore with 100% sell-side visible in order book indicating absence of buying interest post lower circuit hit.

Growth Drivers and Challenges

Growth Drivers:

Integrated E-commerce Supply Chain: Full-service garment manufacturing with end-to-end warehousing and logistics services for major e-commerce platforms including Myntra, Ajio, and Flipkart with technologically advanced and integrated Warehouse Management System (WMS) ensuring operational efficiency.

Improving Financial Metrics: PAT margin improving to 14.34% from 8.82% in FY25, ROE of 34.52%, ROCE of 18.99%, debt-to-equity reducing from 1.76 to 1.04, attractive post-IPO P/E of 12.5x.

Challenges:

Aggressive Pricing: Analyst notes issue appears aggressively priced with quantum jump in bottom lines from FY25 onwards appearing inflated data to pave way for fancy valuations, recommending only for risk seekers.

Inconsistent Performance: Revenue of ₹85.51 crore in FY25 versus ₹88.91 crore in FY23 and ₹50.01 crore in FY24 indicating inconsistency in top line performance raising sustainability concerns.

Lower Circuit Hit: Despite opening premium of 6.02%, stock quickly hit lower circuit at 5% down from open price indicating profit booking and weak post-listing sentiment

Small Scale Operations: Small post-IPO equity base indicating longer gestation for mainboard migration, significant promoter dilution from 97.15% to 69.07% post-IPO, total borrowings of ₹24.63 crore against net worth of ₹23.59 crore.

Utilisation of IPO Proceeds

Working Capital: ₹36.50 crore for funding working capital requirements representing largest allocation supporting garment manufacturing and e-commerce supply chain operations.

General Corporate Purposes: ₹7.35 crore for general corporate purposes.

Financial Performance

Revenue: ₹47.33 crore for H1 FY26, ₹85.51 crore for FY25, growth from ₹50.01 crore in FY24, reflecting expanding garment manufacturing and e-commerce supply chain operations for major online marketplaces.

Net Profit: ₹6.78 crore in H1 FY26, ₹7.54 crore in FY25, significant growth from ₹2.27 crore in FY24 and ₹2.66 crore in FY23, demonstrating strong profitability improvement with post-IPO EPS of ₹17.28 and attractive P/E of 12.5x.