Fractal Analytics, India’s pioneering AI firm, faces a paradox: while India remains its innovation hub, the bulk of its revenue continues to flow from global markets, especially North America. Despite India’s vast AI potential, muted enterprise demand and cautious investors highlight the challenges of scaling AI adoption domestically.
Fractal Analytics, co-founded by Srikanth Velamakanni, has long positioned India as the heart of its innovation journey. Yet, the company’s recent IPO debut and revenue distribution underscore a persistent gap between India’s AI potential and actual enterprise demand.
Key Highlights
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Fractal’s IPO debut in February 2026 was underwhelming, listing below issue price and closing at ₹873.70, reflecting investor caution amid broader software sell-offs.
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Nearly two-thirds of Fractal’s revenue comes from North America, while India continues to serve primarily as its R&D and innovation hub.
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The company reported H1 FY26 operating revenue of ₹1,559 crore, with strong traction in global enterprise markets.
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Fractal is building a 70‑billion-parameter large language model and has launched Vaidya 2.0, a healthcare-focused AI system, signaling its push into sovereign-scale AI development.
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India’s AI market is projected to reach $126 billion by 2030, with a GDP impact of $1.7 trillion by 2035. Enterprise AI alone is expected to surge from $11 billion in 2025 to $71 billion by 2030, a 6.5x growth.
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Despite this, domestic enterprise adoption remains sluggish, leaving India’s AI ecosystem heavily reliant on innovation rather than demand-driven revenue.
The dilemma for Fractal lies in balancing its global enterprise focus with India’s untapped potential. While the IndiaAI Mission and rising live use cases in healthcare and enterprise sectors promise growth, the missing demand engine continues to challenge the scalability of AI adoption in India.
Sources: Inc42, TechCrunch, Let’s Data Science News