Can Fusion CX IPO deliver long-term growth for high-risk investors?
Fusion CX is poised to raise ₹500 crore through a fresh equity offering and ₹202 crore via an offer for sale. Post-IPO, the promoter's stake will be trimmed to about 80%. With impressive revenue and profit growth over the past three years, alongsi...
The promoter stake will fall to around 80% after the IPO from 96% on a fully diluted basis.
ET Intelligence Group: Fusion CX, a business process outsourcing company, plans to raise ₹500 crore through fresh equity to repay debt and fund acquisitions and ₹202 crore through an offer for sale. The promoter stake will fall to around 80% after the IPO from 96% on a fully diluted basis. The company derives over 90% revenue from overseas markets, exposing itself to geopolitical uncertainties and currency fluctuations. On the positive side, it has shown a strong growth in revenue and profits over the past three years and it plans to become debt free after the IPO. It has so far not faced any client-side pressure on either billing or deliverables. It has also forayed in artificial intelligence (AI) related data infrastructure services to take advantage of the opportunities in this segment. Given these factors, investors with higher risk appetite may consider the IPO over the long term.
Business
Incorporated in 2004, Fusion CX provides multichannel customer support through voice, email, chat, social media and messaging to companies. Its workforce expanded to 13,735 as of June 2026 from 8,539 at the end of March 2024. It had 40 delivery centres and two sales offices across13 countries as of June 2026. The US is its major market contributing over 77% to revenue, followed by India at around 10%, and Australia and Europe each at around 7-8%. The top 10 clients contributed around 50% of the revenue in FY26. In the current year, the company acquired VA Platinum offshoring to expand presence in Australia.
Revenue rose nearly two times to ₹1,818 crore while net profit grew nearly five times to ₹169.8 crore between FY24 and FY26. The operating margin before depreciation and amortisation (Ebitda margin) expanded to 18.1% from 10.6%. It was at the lower end of the margin band of 16-34% for the peer group. The return on equity rose to 30.3% from 13.4% during the period. This compares with 15-32% range for peers.
The company demands a FY26 trailing price-earnings (P/E) multiple of 25 considering post-IPO equity. Based on annualised June 2026 quarter earnings of ₹55.7 crore, the P/E works out to be 19. Peers including Firstsource Soutions, Sagility, and Eclerx Services trade at forward P/Es of 31, 24, and 21.
Fusion CX IPO opens for subscription; GMP at 12%. Should you bid or skip?
