Most pages covering the Fusion CX IPO put its price to earnings ratio at about 21 times. That figure comes out of the prospectus, and it is not the figure you pay.
It is calculated on the share count before the issue. Fusion CX is selling ₹500 crore of new shares, which adds about 1.73 crore shares to that count. Recompute on the post-issue capital and the multiple is 24.6 times.
This is not a trick, and nobody is hiding anything. The prospectus reports earnings per share the way accounting standards require, using the weighted average number of shares that existed during the year being reported. That is the correct way to report a historical figure. It is simply not the right denominator for a buyer deciding what to pay today, because the shares you are buying will exist alongside the new ones.
This article works through that number, and through the ₹362.64 crore of goodwill sitting behind it.
Fusion CX IPO price band, dates and issue size
Figures as on 12 October 2026. Share counts and the use of proceeds come from the red herring prospectus dated 8 October 2026, the band and schedule from the price band announcement of 9 October 2026.
| Detail | Value |
|---|---|
| Bid dates | 14 October 2026 to 16 October 2026 |
| Price band | ₹275 to ₹289 per share |
| Face value | ₹1 per share |
| Lot size | 51 shares |
| Minimum retail application | ₹14,739 at the cap price |
| Issue size | ₹702 crore |
| Structure | ₹500 crore fresh issue plus ₹202 crore offer for sale |
| Allotment | 19 October 2026 |
| Listing | 22 October 2026, on BSE and NSE, tentative |
At ₹289, post-issue market capitalisation works out to ₹4,172.01 crore.
Part of the issue is allocated to anchor investors a day before public bidding opens, which is standard for a book-built issue. Anchors are large institutional buyers who commit early at a fixed price and accept a lock-in on their shares. Their participation is published before retail bidding starts, which is one of the few pieces of hard information available at that point. Allotment is due on 19 October, when you can check your ipo allotment status.
Why the Fusion CX IPO P/E you are quoted is too low
The prospectus reports basic earnings per share of ₹13.47 for FY26. Divide ₹289 by that and you get 21.5 times, which is the number most listing pages carry.
The denominator is the problem. Earnings per share uses the weighted average shares outstanding during FY26, roughly 12.71 crore. After the fresh issue the count rises to about 14.44 crore, and profit does not rise with it on day one.
Work it through in three steps.
Step one. The fresh issue is ₹500 crore. At the cap price of ₹289, that creates about 1.73 crore new shares.
Step two. Add those to the 12.71 crore weighted average and the post-issue count is about 14.44 crore.
Step three. The arithmetic for a buyer is therefore ₹4,172.01 crore of post-issue market capitalisation against FY26 profit of ₹169.84 crore. That is 24.6 times.
Here is where it sits against the peer set the company itself chose.
| Company | FY26 P/E | FY26 return on net worth |
|---|---|---|
| Fusion CX at ₹289, post-issue | 24.6 times | 30.74% |
| Alldigi Tech | 14.12 times | 29.00% |
| eClerx Services | 19.65 times | 53.00% |
| Sagility India | 21.66 times | 6.47% |
| Firstsource Solutions | 22.27 times | 15.00% |
| Inventurus Knowledge Solutions | 31.41 times | 7.58% |
| Hinduja Global Solutions | 51.07 times | 2.00% |
Source: red herring prospectus, Basis for Offer Price section. Peer multiples are based on closing prices as on 4 September 2026. The Fusion CX row is computed on post-issue capital.
The peer average is 26.70 times, so 24.6 times still sits below it.
[Editor note: your draft gave 26.65. The six figures above average 26.6967. If the prospectus states 26.65, cite it; otherwise use 26.70.]
Two things follow, and they pull in opposite directions, which is why both belong here.
The dilution is not value destroyed. The ₹500 crore stays with the company and goes to work, mostly repaying debt. A rupee of equity raised and used to retire a rupee of debt leaves the enterprise worth roughly the same and the equity worth more, net of the interest saved. The post-issue multiple is higher than the quoted one, but the company on the other side of it carries less debt.
What changes is that the gap to the peer group is narrower than the quoted figure suggests. At 21.5 times, Fusion CX looks like it is being offered at a meaningful discount to a 26.7 times average. At 24.6 times, the discount is slim. Note also that the peer average is dragged upward by Hinduja Global at 51.07 times on a 2.00% return on net worth, which is a high multiple on weak returns rather than a sign of quality. Averages built from six companies with returns ranging from 2% to 53% should be handled carefully.
Nine acquisitions since 2018 built the growth
Revenue rose from ₹991.32 crore in FY24 to ₹1,818.14 crore in FY26, a compound rate of 35.43%, and profit went from ₹36.26 crore to ₹169.84 crore.
The prospectus is direct about where that came from, listing nine acquisitions since 2018 with a combined disclosed consideration of ₹375.85 crore.
| Year | Target | Consideration (₹ crore) |
|---|---|---|
| 2026 | VA Platinum Offshoring, Australia | 128.32 |
| 2025 | Sequential Technology International, USA | 69.19 |
| 2025 | Skycom BPO, El Salvador and USA | 33.57 |
| 2025 | Scribe.ology, USA | 2.40 |
| 2024 | Ready Call Center, Belize | 49.95 |
| 2024 | S4 Communications, USA | 1.71 |
| 2022 | Boomsourcing, USA | 38.77 |
| 2021 | Advanced Communications Group, USA | 16.35 |
| 2018 | Ameridial, USA | 35.59 |
Source: red herring prospectus, Objects of the Offer section.
Six of the nine closed in the last three years, and a wholly owned subsidiary has signed a non-binding letter of intent to acquire a business called Impacx.
A company built this way is usually described as a roll-up: it grows by buying smaller operators and folding them into a single platform. Roll-ups are a legitimate model and some are very successful. They are also harder to read than organic growers, for one specific reason. When you compare a roll-up's revenue this year against two years ago, you are not comparing the same business against itself. You are comparing a larger collection of businesses against a smaller one.
Growth bought this way is still growth, and the integration shows in margins. Profit after tax margin went from 3.66% in FY24 to 9.34% in FY26. That improvement is the thing a roll-up has to demonstrate, because the whole case for the model is that the combined operation runs better than the parts did separately. On this measure the company has evidence.
Two qualifications belong alongside it. The FY26 and FY24 revenue bases are not the same business, so the 35.43% compound rate measures acquisition plus organic growth together, and the prospectus does not separate them in that headline. And revenue from operations fell 10.29% in FY24, so the compound rate starts from a low point. Both are disclosed. Neither is a reason to discount the margin improvement, which is real.
What those acquisitions left on the balance sheet
Risk factor 8 carries the company's own summary: goodwill and other intangible assets are its largest assets.
Goodwill is what arises when you pay more for a business than the fair value of its identifiable net assets. It is not a mistake or a fudge. It is the accounting record of the premium paid, and acquisitive companies accumulate it by definition. What matters is how much of the balance sheet it occupies and whether it is still worth what it says.
Goodwill stood at ₹362.64 crore as on 30 June 2026, or 26.51% of total assets, against ₹87.64 crore in FY24. Other intangibles, which include software and acquired customer lists, add ₹101.77 crore.
Set that against net worth of ₹619.65 crore on the same date. Goodwill alone is 58.5% of it, and goodwill plus other intangibles is 74.9%.
Strip both out and tangible net worth is ₹155.23 crore, about ₹12.22 per pre-issue share. The reported net asset value is ₹48.35 per share.
That is the number worth sitting with. Three quarters of the book value you are buying records past purchase prices rather than assets that could be sold.
No impairment has been taken in FY24, FY25, FY26 or the June 2026 quarter, and the prospectus says so plainly. An impairment is a write-down taken when an acquired business stops being worth what was paid for it. Not having taken one over three years is consistent with the acquisitions performing as expected. It also means there is no history of how this management handles an acquisition that disappoints, because none has been written down yet.
Four acquisitions carry earnout payments still open, meaning further sums fall due if the acquired businesses hit agreed targets. One has produced ongoing litigation with Sequential Technology International Holdings LLC.
None of that makes the goodwill wrong. What it means is that the asset side of this balance sheet is a record of a strategy rather than a collection of things with independent resale value, and that the strategy has not yet been tested by a failure.
Where the ₹500 crore fresh issue goes
This is the clearest difference between Fusion CX and a pure offer for sale. The company receives ₹500 crore, and the prospectus states where it goes.
₹275.70 crore repays borrowings. Total borrowings stood at ₹299.46 crore on a consolidated fund-based basis as on 31 August 2026, and the prospectus describes the repayment as covering 85.60% of total outstanding borrowings. FY26 finance costs were ₹45.47 crore, so most of that charge should come out of future profit. On FY26 profit of ₹169.84 crore, removing the bulk of a ₹45.47 crore interest charge is material, though the tax effect and any residual borrowing mean you should not simply add it back in full.
[Editor note: ₹275.70 crore is 92.07% of ₹299.46 crore, not 85.60%. The percentage is presumably measured against a wider base, perhaps including non-fund-based facilities or a different date. Name the base the 85.60% applies to, or drop one of the two figures. As written they contradict each other in consecutive sentences.]
₹61.15 crore goes to two step-down subsidiaries to upgrade two in-house tools, Arya and MindVoice, across FY27 to FY29. This is the only part of the raise funding capability rather than balance sheet repair.
The balance is for unidentified acquisitions and general corporate purposes, capped by SEBI at 35% of gross proceeds.
Read that last line against the previous section. A company whose growth came from acquisitions is raising money partly to make more of them, with no target named. That is disclosed and permitted, and the cap exists precisely because regulators recognise that unidentified spending cannot be assessed by an applicant. It is the part of this offer you cannot evaluate, and knowing that is more useful than pretending otherwise.
The remaining ₹202 crore is an offer for sale, split equally between two promoter entities, P N S Business Private Limited and Rasish Consultants Private Limited. Their average cost of acquisition is ₹0.13 and ₹0.12 per share. Both keep shares after the issue, subject to the applicable ipo lock-in period.
That cost disclosure is required by SEBI for exactly this reason: so you can see the distance between what early holders paid and what you are being asked to pay. A gap of this size is normal for founders who capitalised a business years ago, and it is not evidence of anything on its own. It is context, and it is disclosed so you have it.
Three numbers that decide whether a roll-up holds
A business assembled from nine purchases is held together by its clients, its people and its currency. The prospectus reads on each.
Client concentration is rising. The top five clients were 39.55% of FY26 revenue, up from 29.05% in FY24. In outsourced services, concentration cuts both ways: large clients bring scale and stability, and losing one takes a visible bite out of revenue. A ten-point rise in two years is the direction worth tracking, not the level itself.
Attrition is rising too. Voluntary employee attrition was 31.20% in the three months to 30 June 2026, against 26.50% for FY26. Employee expense was 65.62% of FY26 revenue, so this is the largest cost line in the business. In a people business, attrition is not only a cost of rehiring. It is a drag on service quality and on the client relationships above.
Currency exposure is concentrated and unhedged. US and Canada were 85.26% of FY26 revenue, India 11.29%, and UK and Europe 3.11%. The company states it has no hedging arrangements of any kind. It gained ₹17.96 crore on foreign exchange in FY26, which is 10.6% of that year's profit.
[Editor note: those three geographies sum to 99.66%. Add the residual line or a "rest of world" note so the reader who adds them is not left wondering.]
That last line cuts both ways, and did so recently. It was a loss of ₹1.44 crore in FY25 and ₹2.55 crore in FY24. A business that does not hedge accepts that this line will swing. In FY26 it swung in its favour by enough to account for a tenth of profit. The same mechanism can run the other way, and in two of the last three years it did.
Reported profit and adjusted profit are ₹39.26 crore apart
The prospectus reports FY26 profit of ₹169.84 crore. It also reports an adjusted profit after tax of ₹209.10 crore, a gap of ₹39.26 crore.
The adjustments are defined in the key performance indicators table and are net of tax. They remove acquisition costs, employee stock option compensation, non-recurring employee benefits and severance, provisions for onerous contracts, depreciation on acquired customer lists, and interest on contingent consideration.
Adjusted figures are not inherently misleading, and companies publish them so investors can see underlying performance without one-off noise. The question is always whether the items removed are genuinely one-off for this particular business.
Several of those follow directly from acquiring companies. This business has closed six acquisitions in three years and intends to close more, with a letter of intent already signed on another. For a company like that, acquisition costs and depreciation on acquired customer lists look closer to a running cost than a one-off. A company that acquires every year has acquisition costs every year.
The company discloses both figures and defines the bridge between them, which is the right practice. The point is knowing which one you are using. On the adjusted figure, the post-issue multiple would be about 20 times rather than 24.6. The 24.6 times above is computed on the reported figure.
Where to find all of this
Everything above sits in five named sections of one document, each listed on the contents page of the ipo prospectus, so you can go straight to the one you want.
- The Offer: the fresh issue and offer for sale split, and the pre-issue share count. This is where you get the denominator for your own multiple.
- Objects of the Offer: what the fresh money does, rupee by rupee, and how much is unallocated.
- Basis for Offer Price: earnings per share, the peer table, the key performance indicators and the adjusted profit bridge.
- The balance sheet: goodwill and intangibles against total equity.
- Risk factors 8, 9 and 10: impairment, currency and acquisition integration.
Those five change the arithmetic rather than the narrative, which is why they are worth the twenty minutes.
Where to go from here
Three sections carry most of what matters: Objects of the Offer, the balance sheet, and the key performance indicators. They tell you where the new money goes, what the old acquisitions left behind, and whether clients and employees are staying.
The red herring prospectus is on the company's website and on the SEBI, BSE and NSE sites. While the issue is open, the exchanges publish subscription data live through the bidding window. Once it has listed, the same three sections are what you would read before buying the share in the market.
If you decide to apply, the IPO section on the Indiabulls Securities platform carries the live issue details. Whichever way you go, do the multiple on the post-issue count first.
