Scaling Fashion Supply Chains with Technology: A Conversation with Pankaj Agarwal Ahead of Fractal Industries Limited’ IPO

Pankaj Agarwal, Managing Director of Fractal Industries

New Delhi [India], February 16: As India's e-commerce fashion industry scales at an unprecedented pace, the need for agile, technology-enabled supply chain partners has become more critical than ever. From managing thousands of SKUs to ensuring seamless fulfilment, returns, and compliance, operational excellence is now a key differentiator in this competitive ecosystem. Fractal Industries Limited, a technology-driven end-to-end supply chain and apparel manufacturing company, is emerging as a strong player in this space as it prepares to launch its IPO on February 16, 2026. In this exclusive interaction, Pankaj Agarwal, Managing Director of Fractal Industries, shares insights into the company's business model, expansion strategy, technology backbone, and long-term vision for scaling both its supply chain platform and proprietary fashion brand.

1. Fractal operates in a highly competitive supply chain ecosystem. What differentiates your technology-enabled model from other third-party logistics and apparel supply chain players?

Our competitive advantage lies in managing complexity at scale. We are handling nearly 10,000 SKUs across multiple categories and processing thousands of orders daily through an integrated system. We have strong expertise in reverse logistics, quality inspection aligned with US AQL standards, and a technology-driven warehouse management system integrated with major marketplaces.

Competition is intensifying on pricing, but execution capability, compliance, and reliability are where we continue to differentiate. What is often overlooked is the depth of systems and processes built over time—technology integration, quality frameworks, reverse logistics capability, and governance structures. These may not always be visible externally, but they are essential for managing scale, protecting margins, and sustaining long-term growth.

2. With the e-commerce fashion sector expanding rapidly in India, what specific growth strategies will Fractal adopt over the next 3–5 years to scale operations?

Over the next five years, we see Fractal becoming a more integrated fashion supply chain and brand-led organization with stronger D2C presence and deeper marketplace partnerships. The focus will be on profitable growth, high return ratios, and building a resilient platform that can scale across geographies and categories.

Growth will be driven by three clear levels. First is deeper penetration across existing marketplaces with a higher share of value-added models like pure-play marketplace structures. Second is gradual expansion of our own B2C brand 7ate9, which allows better margin control and direct consumer connect. Third is operational leverage through automation, better capacity utilization, and technology efficiency improvements.

3. How does the company plan to deploy the funds raised through this IPO, and how will this capital accelerate your expansion roadmap?

The majority of the capital will be invested in working capital, particularly to increase inventory and SKU levels and promote our new brand 7ate9. Currently, we sell approximately 1% of our total inventory daily. Increasing inventory will directly support higher sales volume and improve overall profitability. That will be the primary utilization of IPO funds.

4. You have recently introduced your own fashion brand, ‘7ate9'. How do you plan to balance your role as a supply chain partner while building a consumer-facing brand?

A brand is always associated with a purpose, and we have a clear vision to position 7ate9 among the top online fashion brands in India. Our supply chain expertise will play a major role here. We are targeting around ₹20 crore in sales from the brand by FY26.

We have also undertaken co-branding initiatives with Myntra, which will provide visibility and brand push on their platform. This partnership is expected to significantly support both branding and sales. Our operational expertise ensures we can manage both roles efficiently.

5. Technology is central to your operations. Could you elaborate on the proprietary systems or digital capabilities that improve efficiency, speed, and scalability?

Our revenue mix has evolved significantly from an outright wholesale model to a predominantly marketplace-linked and B2C-oriented model. This shift has improved margins and scalability.

Demand visibility is supported by long-term relationships with leading ecommerce platforms  along with repeat business. While we remain cautious, near- to medium-term order flows are stable and aligned with our growth plans. These systems continuously improve speed and scalability, and this will only strengthen as e-commerce grows every year.

6. What are the key operational or regulatory risks in the e-commerce supply chain sector, and how is Fractal prepared to mitigate them?

One of the biggest challenges in this industry is managing returns. Nearly 30–40% returns are common, and high returns can block working capital and tighten cash flow. We address this by investing early in warehouse systems, reverse logistics capability, and multi-level quality control.

Financial discipline is equally important. Rather than chasing growth at any cost, we focus on predictable cash flows, strong consumer relationships, and scalable processes. Companies that manage returns effectively are the ones that succeed in this sector.

7. Fractal is listing on the BSE SME platform. What message would you like to give to retail and institutional investors considering participation in this issue?

We are confident in our ability to deliver strong and scalable growth from this point onward, backed by our robust business model, clear strategy, and expanding market opportunities. We invite both retail and institutional investors to participate in the IPO and become part of our long-term growth journey. We remain committed to creating sustainable value, maintaining high standards of corporate governance, and delivering consistent performance for all stakeholders.

8. Where do you envision Fractal Industries five years from now, and what milestones should investors look forward to?

Over the next five to seven years, we see Fractal becoming a more integrated fashion supply chain and brand-led organization with a stronger D2C presence and deeper marketplace partnerships driven by our own brand portfolio. The focus will be on profitable growth, high return ratios, and building a resilient platform that can scale across geographies and categories.

As India's digital commerce ecosystem continues to evolve, companies that combine operational discipline with technology-led execution are best positioned to capture long-term value. Fractal Industries Limited's focus on managing complexity at scale, strengthening marketplace partnerships, and expanding its proprietary brand portfolio reflects a strategy centered on sustainable and profitable growth. With its upcoming listing on the BSE SME platform, the company aims to leverage fresh capital to deepen inventory strength, enhance scalability, and reinforce its supply chain infrastructure. Backed by over two decades of industry experience and a systems-driven approach, Fractal is positioning itself not just as a logistics enabler but as a comprehensive fashion supply chain and brand-led platform for the future.

Disclaimer: This article is for informational purposes only and does not constitute financial advice.

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