Fusion CX

IPO Size: Rs. 702 cr

• Fresh Issue of Rs. 500 cr (12% dilution) for (i) repaying Rs. 275 cr loan, to become net debt free (ii) IT investment for Rs. 61 cr till FY29E (iii) unidentified acquisition and general corporate purposes
• Offer for Sale (OFS) of Rs. 202 cr by promoter (98.5% to shrink to 82.2% post IPO)

Price band: Rs. 275-289 per share

M cap: Rs. 4,151 cr (IPO is 17% of m cap)

IPO Date: Wed 14^th Oct to Fri 16^th Oct 2026, Listing Thu 22^nd Oct 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

Information Technology enabled Service (ITeS) Company

Fusion CX is a 22-year-old Kolkata headquartered digital customer experience (CX) service provider, serving across platforms such as voice, email, chat, social media, message, besides providing AI data infrastructure services, to 208 clients. Customer services (like query resolution, support) and customer acquisition services (like tele sales, digital marketing) account for 2/3^rd of company’s Rs. 2,000 cr annual revenue. Customers from telecom and other utilities account for 45% of revenue with balance split equally between high-tech and travel sectors, retail, healthcare, BFSI. Company derives 70%+ revenue from US, with senior management based out of US. Balance revenue is generated from Canada, Australia, India and Latin America.

 

People Dependent Business Model

Fusion CX has over 13,700 employees spread across India, Philippines, Latin America. Nearly 90% of revenue is generated on a fixed fee model based on number of employees and fixed price per employee per month/year. Thus, business model is essentially an outsourced people-heavy service offering.

In addition to this, a high employee attrition rate of 30% is operationally challenging and adds to cost pressure. Besides, largest customer accounts for 25-30% of revenue currently, up from 18% previously, adding to concentration risk, for the small cap stock.

 

Acquisition-led Growth

Company has made 6 overseas acquisitions in the past 4 years, indlucing VA Platinum Offshoring Pty Ltd in Australia in 2026. FY26 proforma revenue stood at Rs. 1,959 cr, with PAT of Rs. 189 cr. Several tax sops in multiple geographies keeps income tax rate lower at 10-12%, resulting in 9.6% net margin.

For Q1FY27, proforma revenue was Rs. 534 cr, with PAT of Rs 64 cr and net margin of 12%. EPS on proforma basis, stood at Rs. 14.95 for FY26 and at Rs. 5.05 for Q1FY27.

Interestingly, net margins more than doubled from 3.6% in FY24 to over 9% in FY26, in the run-up to IPO. Also, in FY22 and FY23, company’s entire bottomline was attributed to US Government’s covid-19 support scheme, highlighting huge dependence on US, amidst rising protectionist policy environment.

 

Conflicting Capital Structure

As of 30.6.26, Rs. 89 cr loan was given to related party. As of the same day, company carries gross debt of Rs. 238 cr – both of which are contradictory.

To add to this, company is 12% diluting equity to fund IT investment of Rs. 61 cr in subsidiary, which can be easily met from loans extended to related parties.