Fractal Analytics Ltd IPO

Security breaches, cyber-attacks, computer viruses and hacking activities may cause material adverse effects on the company's business, financial performance and results of operations and expose the company to liability, which could adversely affect its business and our reputation.

The company's success depends on its ability to attract, retain and expand relationships with the company's clients.The company derived 54.2% of its revenue from operations in the company's Fractal.ai segment from our top-10 clients, of which one client contributed 8.2% of its revenue, in the six months ended September 30, 2025. The company also derived 79.6% of its revenue from operations in the company's Fractal.ai segment from its existing "Must Win Clients" ("MWC") in the six months ended September 30, 2025. If the company cannot maintain and expand its relationships with the company's existing client base or add new clients, the company's business, financial condition, cash flows and results of operations may be adversely affected.

The company's focus industries - consumer packaged goods and retail ("CPGR"), technology, media and telecom ("TMT"), healthcare and life sciences ("HLS"), and banking, financial services and insurance ("BFSI") contributed 37.5%, 27.2%, 17.0%, and 12.2%, respectively in the six months ended September 30, 2025 to the company's revenue from operations in the Fractal.ai segment. Any decrease in demand for AI solutions in these industries could adversely affect its business, financial condition and results of operations.

The company had a net loss in Fiscal 2024 and losses before exceptional items and tax expense in Fiscals 2024 and 2023. There is no assurance that the company will not incur losses in the future as the company expands the company's operations.

The Company, Subsidiaries, and two of our Directors are involved in certain legal proceedings. Any adverse decision in such proceedings may render the company/them liable to liabilities/penalties and may adversely affect its business, cash flows and reputation.

The company derived 64.9%, 64.1%, 65.2%, 61.9% and 66.0% of its revenue from operations from the United States of America for the six months ended September 30, 2025, six months ended September 30, 2024, Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively. The company's global operations involve challenges and risks that could increase its expenses, adversely affect the company's results of operations and require increased time and attention from its management.

The company's business depends on the quality and successful implementation of its AI solutions. Delays or failures in meeting contractual timelines or the expectation of the company's clients may result in cost overrun, loss of business and disputes which in turn could adversely impact its business, financial condition and results of operations.

The company has incurred negative cash flows in the past. There is no assurance that the company will not incur losses in the future as the company expands the company's operations.

The company may be adversely affected by the evolving laws and regulations governing its business and the introduction of any new applicable laws and regulations in the jurisdictions the company operates in. Failures to comply with the existing, and changes to, laws and regulations applicable to the company's business could subject the Company to enforcement actions and penalties and otherwise harm our business.

The company's Statutory Auditor has noted certain observations in auditor's report under "Report on Other Legal and Regulatory Requirements" and in their reporting under the Companies (Auditor's Report) Order, 2020.