Saas firm Capillary Technologies has filed its draft red herring prospectus (DRHP) with SEBI on June 19, 2025, for an IPO worth 430 crore rupee (US$49.6 million).

Capillary Technologies had previously filed for an IPO in 2021 but postponed it due to unfavorable market conditions.

The IPO includes a fresh issue of shares valued at around US$50 million and an offer for sale (OFS) of 1.83 crore equity shares.

Promoter Capillary Technologies International Pte. Ltd will sell 1.43 crore shares, representing 77.6% of the OFS.

For FY25, the company posted 598 crore rupee (US$69 million) in revenue, up 14% from 525 crore rupee (US$60.6 million) in FY24.

It also reported a net profit of 13.3 crore rupee (US$1.5 million), recovering from a net loss of 59.4 crore rupee (US$6.9 million).

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🔗 Source: YourStory

🧠 Food for thought

1️⃣ Capillary’s financials reflect the challenging SaaS landscape of 2025

Capillary’s 14% year-on-year revenue growth to Rs 598 crore sits below the industry median of 30% for public SaaS companies as of late 2024 1.

The company’s pivot to profitability, turning a Rs 59.4 crore loss into a Rs 13.3 crore profit, appears strategically timed for the IPO, especially amid a cooling SaaS market where Q1 2025 showed historic lows in growth rates 2.

This performance shift reflects broader industry challenges where B2B SaaS companies faced increased churn rates (up 11%) that offset new sales growth (up 10%) in early 2025 2.

The timing of Capillary’s second IPO attempt demonstrates resilience, coming after their 2021 filing was withdrawn due to unfavorable market conditions—a decision that now appears prudent given their improved financial position.

2️⃣ IPO allocation strategy aligns with cloud market expansion projections

Capillary’s decision to allocate Rs 120 crore to cloud infrastructure reflects an industry-wide shift toward cloud investment, with the public cloud market projected to reach $723.4 billion in 2025 3.

The Rs 151.5 crore earmarked for R&D (35% of the fresh issue) signals strategic alignment with industry forecasts that predict SaaS will represent $780 billion of the cloud market by 2030 4.

These investments position Capillary to potentially capitalize on the expected 18.4% CAGR of the SaaS market through 2032, which is projected to grow from $317.55 billion in 2024 to $1,228.87 billion by 2032 1.

The allocation for potential acquisitions suggests Capillary recognizes the value of inorganic growth in a market where valuation multiples for private SaaS companies range from 3x to 10x annual recurring revenue 5.

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