Fusion CX IPO (14-16 October) Analysis

Fusion CX Limited is a customer experience (CX) service provider delivering services across voice, email, chat, social media and messaging channels, with technology playing a central role in its service delivery model.

The company also provides AI Data Infrastructure Services, including data collection, data annotation and labelling, and teleoperations services. It focuses on key verticals including telecom and other utilities, high tech growth and travel, BFSI, retail and healthcare and life sciences.

The company operates a multilingual global delivery network of 40 delivery centres and two sales offices spread across 13 countries as on June 30, 2026. A meaningful part of its growth has come from acquisitions, having acquired six companies in the last three years, including Skycom Group, Scribe.ology LLC, Sequential Technologies LLC and S4 Communications LLC in the United States, VA Platinum Offshoring Pty Ltd in Australia and Ready Call Center Limited in Belize.

The company derives a significant majority of its revenue from customers outside India, with 88.71% of revenue from operations in FY2026 coming from outside India and 81.70% from North America alone.

Fusion CX's total number of active clients grew to 228 in FY2026 from 190 in FY2024, including an increase in high value clients contributing more than USD 3.00 million per annum, from seven in FY2024 to 12 in FY2026. Its top 5, top 10, top 15 and top 20 clients have an average relationship length of between 10.31 and 13.02 years, reflecting long standing customer relationships.

Key Basics

This is a combined Issue consisting of a Fresh Issue of Equity Shares aggregating up to Rs.500.00 Crore (Rs.5,000.00 million) by the company and an Offer for Sale of Equity Shares aggregating up to Rs.202.00 Crore (Rs.2,020.00 million) by the Promoter Selling Shareholders.

Particulars	Details	Particulars	Details
Issue Type	Fresh Issue + Offer for Sale	Face Value	Rs.1 per Equity Share
Fresh Issue	Up to Rs.500.00 Crore	Offer for Sale	Up to Rs.202.00 Crore
Price Band	[TBD]	Lot Size	[TBD]
Bid or Offer Opens	[TBD]	Bid or Offer Closes	[TBD]
Listing At	BSE and NSE	RHP Date	October 8, 2026

The RHP states that there have been no primary or secondary transactions in Equity Shares in the 18 months preceding the RHP that meet the disclosure threshold, so a weighted average cost of acquisition for recent transactions is not applicable.

How Will the IPO Money Be Used?

Object	Estimated Amount (Rs. Lakhs)
Repayment or prepayment of outstanding borrowings of the company and certain subsidiaries	27,569.5
Investment in step down subsidiaries Omind Technologies Inc. and Omind Technologies Private Limited, for upgrading IT tools Arya and MindVoice	6,114.6
Inorganic growth through unidentified acquisitions and other strategic initiatives, and General Corporate Purposes	[TBD]

A meaningful portion of the Net Proceeds is earmarked for acquisitions where specific targets have not yet been identified, which the RHP itself flags as a risk factor given the inherent uncertainty in such unidentified inorganic growth plans. The company will not receive any proceeds from the Offer for Sale component, which will go entirely to the Promoter Selling Shareholders.

Financial Performance

Revenue, EBITDA and Profitability

The table below sets out Fusion CX's restated consolidated financial performance for the three Fiscals ended March 31, 2026, converted from Rs. Millions to Rs. Lakhs.

Particulars (Rs. Lakhs)	FY2026	FY2025	FY2024
Revenue from Operations	1,81,813.8	1,32,929.6	99,131.5
EBITDA	32,987.1	19,777.6	10,461.7
EBITDA Margin	18.14%	14.88%	10.56%
Profit After Tax (PAT)	16,984.0	7,431.4	3,626.0
PAT Margin	9.17%	5.50%	3.55%
Basic EPS (Rs.)	13.47	5.90	2.88
Return on Net Worth (RoNW)	30.74%	20.96%	13.42%

Fusion CX has delivered strong and consistent growth across all three Fiscals, with revenue nearly doubling from Rs.99,131.5 Lakhs in FY2024 to Rs.1,81,813.8 Lakhs in FY2026, and both EBITDA margin and PAT margin expanding meaningfully each year.

Return on Net Worth has also improved steadily, reaching 30.74% in FY2026. A portion of this growth has come from the six acquisitions completed over the last three years, so period over period comparisons reflect both organic growth and the contribution of newly acquired businesses.

The company is heavily dependent on customers outside India, which contributed 88.71% of revenue from operations in FY2026, of which North America alone contributed 81.70%, exposing the business to foreign exchange movements and economic conditions in these markets. Employee benefits expense, a key cost line for a people intensive CX business, was 65.62% of revenue from operations in FY2026.

Balance Sheet and Cash Flow

Particulars (Rs. Lakhs)	FY2026	FY2025	FY2024
Total Assets	1,38,514.6	1,14,325.2	76,801.6
Total Equity (Net Worth)	56,060.2	35,836.2	27,114.1
Trade Receivables	37,505.7	33,219.9	25,403.6
Net Asset Value per Share (Rs.)	43.73	NA	NA
Net Cash from Operating Activities	26,422.4	10,244.8	3,925.8
Goodwill	36,220.2	28,808.9	8,763.9

Goodwill has grown sharply, from Rs.8,763.9 Lakhs in FY2024 to Rs.36,220.2 Lakhs in FY2026, reflecting the company's active acquisition strategy, and the RHP itself flags that goodwill and other intangible assets form the company's largest asset category, with any future impairment having a material impact on reported results.

Operating cash flow has improved substantially in step with profitability, which is encouraging, though the company also carries meaningful indebtedness, with total borrowings, including lease liabilities, used to fund both working capital and acquisitions.

How Does It Compare to Peers?

The RHP discloses a comparison with six Indian listed CX and business process management peers: FirstSource Solutions Limited, eClerx Services Limited, Alldigi Tech Limited, Inventurus Knowledge Solutions Limited, Sagility India Limited and Hinduja Global Solutions Limited.

Company	Total Income (Rs. Lakhs, FY2026)	RoNW (%)	NAV per Share (Rs.)
Fusion CX Limited	1,85,183.1	30.74%	43.73
FirstSource Solutions Limited	9,56,384.7	15.00%	61.80
eClerx Services Limited	4,21,820.0	53.00%	278.00
Alldigi Tech Limited	60,804.0	29.00%	235.00
Inventurus Knowledge Solutions Limited	3,21,098.2	7.58%	568.00
Sagility India Limited	7,29,083.0	6.47%	30.50
Hinduja Global Solutions Limited	4,85,702.0	2.00%	53.00

On Return on Net Worth, Fusion CX's 30.74% in FY2026 ranks second among the disclosed peer set, behind only eClerx Services at 53.00%, and well ahead of larger peers such as FirstSource Solutions at 15.00% and Sagility India at 6.47%. The company's total income of Rs.1,85,183.1 Lakhs in FY2026 is the smallest among the disclosed peer set, indicating meaningful scope for scale growth relative to larger listed competitors in the space.

Key Risks

● Significant reliance on acquisitions for growth, with goodwill and other intangible assets, now the company's largest asset category at Rs.36,220.2 Lakhs as at FY2026, up from Rs.8,763.9 Lakhs in FY2024. A portion of the Fresh Issue proceeds is earmarked for further unidentified acquisitions, and any future impairment of goodwill or failure to realise the anticipated benefits of past or future acquisitions could materially affect reported results.

● Heavy geographic revenue concentration outside India. 88.71% of FY2026 revenue from operations came from customers outside India, and 81.70% from North America alone, exposing the business to foreign exchange movements, economic conditions and potential anti outsourcing sentiment in these markets, against which the company does not have any hedging arrangements.

● Prior director disqualification of the Chairman, Managing Director and Chief Executive Officer. Pankaj Dhanuka's Director Identification Number was suspended in September 2017 due to a prior company's failure to file financial statements or annual returns for three consecutive financial years. The disqualification was subsequently resolved through a condonation scheme and his DIN was reinstated in December 2019, but the RHP itself notes there can be no assurance against future penalties or disqualifications.

● Customer concentration, with the top 10 customers contributing 52.17% of revenue from operations in FY2026, up from 41.04% in FY2024, and client contracts generally of short duration with limited or no minimum commitment provisions.

● Statutory Auditor emphasis of matter observations relating to a scheme of amalgamation and merger of certain subsidiaries accounted for using the pooling of interest method, and separately in respect of the special purpose interim financial statements prepared for this Offer, which investors may wish to review in full in the RHP's financial statements section.

● The company has provided an unsecured loan to an entity associated with one of its Promoters, Rasish Consultants Private Limited, as separately disclosed in the RHP's risk factors.

● The Promoters have provided personal guarantees for certain of the company's loan facilities, which if revoked could require the company to arrange alternative security or repayment arrangements.

● There have been instances of delay in payment of statutory dues by the company in the past, and the company carries certain contingent liabilities that have not been provided for in its financial statements.

● A majority of the company's Directors, including Independent Directors, have not previously served as directors on the boards of other listed companies, which may extend the learning curve for listed company governance requirements.

● The company operates in a highly competitive industry and faces risks from large scale consolidation among CX industry players, which could affect operating margins, alongside risks from rapid technological change, including the evolving use of generative AI in customer experience delivery.

Positives to Note

● Strong and consistent financial performance across all three Fiscals presented, with revenue nearly doubling between FY2024 and FY2026, alongside meaningfully expanding EBITDA margin and PAT margin, and Return on Net Worth reaching 30.74% in FY2026, the second highest among the disclosed listed peer set.

● Long standing, sticky customer relationships, with the top 20 customers maintaining an average relationship length of over 10 years, and a growing base of high value clients contributing more than USD 3.00 million per annum, up from seven in FY2024 to 12 in the quarter ended June 30, 2026.

● Diversified global delivery footprint across 40 delivery centres in 13 countries, reducing single location operational risk, combined with a demonstrated track record of successfully sourcing and integrating six acquisitions over the last three years to expand service capabilities and geographic reach.

● Substantially improved operating cash flow generation, growing from Rs.3,925.8 Lakhs in FY2024 to Rs.26,422.4 Lakhs in FY2026, broadly in step with the company's profitability growth.

A Note on Figures

The financial figures disclosed in the Red Herring Prospectus for Fusion CX Limited are stated in Rs. Millions. For consistency with our standard reporting format, all monetary figures in this article have been converted to Rs. Lakhs (1 Million equals 10 Lakhs) unless stated otherwise.