Capillary Technologies IPO: Should You Invest in the Future of Customer Loyalty?

As I navigate the dynamic world of investing, the buzz around a new IPO always catches my attention. This time, it’s Capillary Technologies, a name that might not be on every household’s lips but is a significant player in the enterprise software space. The company is making its debut on the public market, and I’ve decided to take a deep dive into what this offering is all about.

Is this an opportunity to get in on the ground floor of a future tech giant, or is it a riskier bet in a volatile market? Let’s unpack this together.

What Exactly Does Capillary Technologies Do?

Before we get into the nitty-gritty of the IPO, it’s crucial to understand the company’s business. In simple terms, Capillary Technologies provides AI-driven, cloud-native Software-as-a-Service (SaaS) solutions to help businesses enhance customer loyalty and engagement. Think about the loyalty programs you’re a part of, the personalized offers you receive, and the seamless experience you have with your favorite brands across their websites, apps, and physical stores.

There’s a good chance that sophisticated technology, much like what Capillary offers, is powering that interaction.

Their suite of products includes:

• Loyalty+: An AI-powered platform for managing loyalty programs.
• Engage+: A tool for omnichannel customer engagement.
• Insights+: A platform for predictive analytics to understand customer behavior.
• Rewards+: A system for managing the rewards aspect of loyalty programs.
• Customer Data Platform (CDP): This brings together all customer data to create a unified view, enabling personalized marketing.

Essentially, Capillary helps businesses understand their customers better and keep them coming back. They serve a wide range of industries, including retail, financial services, healthcare, and consumer goods, which gives them a diversified client base.

The Capillary Technologies IPO: The Key Details

The Capillary Technologies IPO is a significant event, aiming to raise a substantial amount from the public markets. Here’s a quick rundown of the essential details:

• IPO Dates: The IPO opened for subscription on November 14, 2025, and is scheduled to close on November 18, 2025.
• Price Band: The price for each share has been set in the range of ₹549 to ₹577.
• Issue Size: The total size of the IPO is ₹877.50 crores. This is a combination of a fresh issue of shares and an offer for sale (OFS) by existing shareholders.
• Lot Size: Investors can bid for a minimum of 25 shares and in multiples of 25 thereafter.
• Listing: The shares are proposed to be listed on both the BSE and the NSE, with a tentative listing date of November 21, 2025.

It’s worth noting that there were some reports of the IPO being postponed due to volatile market conditions. However, more recent information confirms that the IPO did indeed open on the scheduled date.

A Look at Capillary’s Financial Health

For me, the financial performance of a company is a critical factor in any investment decision. Capillary Technologies presents an interesting case. The company has seen a significant increase in revenue in recent years.

For the financial year ending March 31, 2025, their revenue grew by 14%. What’s even more impressive is the 121% rise in their profit after tax (PAT) during the same period. After a period of losses, the company turned profitable in FY25.

This turnaround is a positive sign, suggesting that the company’s strategies and acquisitions are starting to pay off. However, it’s also important to consider the valuation. At the upper end of the price band, the company is being valued at a high price-to-earnings (P/E) ratio.

This indicates that the market has high expectations for its future growth, which also comes with a degree of risk if those expectations aren’t met.

What Will the IPO Funds Be Used For?

Understanding how a company plans to use the proceeds from its IPO gives you insight into its future growth plans. Capillary Technologies intends to use the net proceeds from the fresh issue for:

• Funding its cloud infrastructure costs.
• Investing in research and development of its products and platform.
• Purchasing computer systems for its business.
• Funding inorganic growth through acquisitions.
• General corporate purposes.

This allocation suggests a focus on strengthening their technological backbone, innovating their product offerings, and expanding their market presence through strategic acquisitions. Their history of acquisitions, including Brierley and Kognitiv, demonstrates a clear strategy for inorganic growth.

The Competitive Landscape: Who Are Capillary’s Rivals?

Capillary Technologies operates in a competitive space. The customer relationship management (CRM) and loyalty management market is populated by both large, established players and smaller, niche companies. Some of their key competitors include:

• Salesforce
• Adobe
• Oracle
• MoEngage
• CleverTap

While the competition is stiff, Capillary has carved out a niche for itself with its AI-powered, end-to-end loyalty solutions. Their focus on enterprise clients and their global presence are key differentiators.

The Big Question: Should You Invest?

Now for the million-dollar question (or in this case, the ₹14,425 minimum investment question). The initial response from the market has been somewhat lukewarm. On the first day of the IPO, the subscription was relatively low, and the Grey Market Premium (GMP) was nil, indicating a lack of immediate speculative interest.

The Bull Case:

• Growing Market: The customer loyalty and engagement market is expanding as businesses increasingly focus on retaining customers.
• Financial Turnaround: The company’s recent profitability is a positive indicator of its financial discipline and growth potential.
• Strong Client Base: Capillary boasts an impressive list of clients, including major global brands.
• AI-Powered Technology: Their use of artificial intelligence gives them a competitive edge in providing personalized and effective solutions.

The Bear Case:

• High Valuation: The IPO is priced at a premium, which could limit the upside potential in the short term.
• Muted Initial Response: The low subscription on the first day and the nil GMP suggest a cautious investor sentiment.
• Competitive Market: The company faces intense competition from larger and more established players.
• Dependence on Key Sectors: A significant portion of their revenue comes from a few key sectors, which exposes them to sector-specific risks.

My Final Thoughts

Investing in an IPO is always a decision that requires careful consideration of both the potential rewards and the inherent risks. The Capillary Technologies IPO presents a compelling story of a company at the forefront of the customer loyalty revolution, with a strong technological platform and a recent return to profitability.

For me, this is not a stock for short-term gains, especially given the initial market sentiment. However, for a long-term investor who believes in the growth of the SaaS sector and the increasing importance of customer engagement, Capillary Technologies could be an interesting addition to a diversified portfolio. As with any investment, it’s crucial to do your own research, assess your risk appetite, and make an informed decision.

I’ll be watching the subscription numbers closely over the next few days and keeping an eye on how the stock performs upon listing. The journey of Capillary Technologies as a public company is just beginning, and it will be fascinating to see how they navigate the opportunities and challenges that lie ahead.