Amagi IPO: Zomato Moment or Zomato Mistake?
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The second IPO for 2026 is Amagi Media Labs - a strange name to begin with. I was curious about what's with the name, so I googled it. This is what I found - Amagi primarily refers to the ancient Sumerian word for "freedom.
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About Amagi Media Labs (AML)
Founded in 2008, AML is a software-as-a-service (SaaS) company that connects media companies to their audiences through cloud-native technology. The platform helps content providers and distributors upload and deliver video over the internet (commonly known as streaming) through smart televisions, smartphones and applications, instead of traditional cable or settop box services.
They also help monetize such content through targeted advertising services for advertisers. Their technology has enabled the streaming of marquee events, such as the 2024 Paris Olympics, Union of European Football Association (“UEFA”) football tournaments, the Academy of Motion Picture Arts and Sciences Awards (commonly known as the ‘Oscars’), and the 2024 U.S. Presidential debates.
What is changing in the media and entertainment industry and what challenges has it created?
According to the 1Lattice Report, the media and entertainment industry is undergoing a structural shift towards a “new video economy”, led by the transition from traditional cable television to video delivery over the internet. This shift is driven by changing viewer preferences, as audiences now expect to be able to access content anytime and on any device, including smartphones, smart TVs and other internet-connected platforms.
Here are a must-read book for investors: https://amzn.to/4qy2upD
Amagi Media Labs: Financials
Here is a summary of financial numbers from recent years:
Revenue: Revenue has grown consistently over the years. From Rs 681 crore in FY23 to Rs 1,163 crore in FY25, the company has delivered a strong 30.7% CAGR, which signals solid demand traction. H1FY26 continues this momentum with 34.6% YoY growth, indicating that top-line growth remains intact.
Profitability at the Gross Level: Gross margins are a major strength. They have expanded from 64.7% in FY23 to ~69% in FY24–FY26, showing strong pricing power and a scalable business model. Gross profit CAGR of 35.3% is even higher than revenue growth, which is a positive structural indicator.
Operating Performance (Adjusted EBITDA): This is where the turnaround becomes visible.
FY23 and FY24 were deeply loss-making at the EBITDA level
FY25 turned EBITDA positive, though at a modest margin of 2.0%
H1FY26 shows further improvement with 8.3% EBITDA margin
This suggests the business is now moving from a growth-at-any-cost phase to a more disciplined operating model.
Net Profit (PAT): Despite operating improvements, PAT remains negative on a full-year basis. Losses have narrowed meaningfully from ₹-3,213 crore in FY23 to ₹-687 crore in FY25. Importantly, H1FY26 has turned PAT positive, though margins are still thin at 0.9%.
This is a classic high-growth, high-gross-margin business undergoing a profitability transition.
What looks strong
Consistent, high-quality revenue growth
Stable and high gross margins, indicating a defensible business model
Clear improvement in operating leverage from FY25 onward
Visible path to profitability
What investors should be cautious about
Full-year profitability is not yet established
EBITDA and PAT margins are still low and need to sustain improvement
Execution risk remains if growth slows or costs rise again
Who are their customers?
As of September 30, 2025, Amagi served over 400 content providers, over 350 distributors, and over 75 advertisers across more than 40 countries. They are working with more than 45% of the top 50 listed ‘media and entertainment’ companies by revenue (which comprise companies with a presence in streaming and broadcasting and excluding companies that are exclusively only into print media, outdoor advertising, and content creation).
Their customers include global media companies such as Vevo, Lionsgate Studios, DAZN, E.W. Scripps, Sinclair Broadcast Group, VIZIO, Roku, The Trade Desk, and the Tennis Channel.
Amagi Media Labs: Competitive Strengths
One-stop glass-to-glass solutions provider
Positioned within a three-sided marketplace to leverage strong network effects
Positioned within a three-sided marketplace to leverage strong network effects
Trusted by global customers with long-term relationships
Amagi Media Labs: Growth Potential
Continue to invest in product innovation and technology
Harness Amagi INTELLIGENCE to drive innovation across their platform
Scale profitably through disciplined capital allocation
Deepen engagement within the media and entertainment ecosystem
Bottom Line
Total issue size is Rs 1789 crore, with a price band of Rs 343 - Rs 361. The IPO date is 13 January to 16 January. The Grey Market Premium is showing as 10% as of 11 January 2026.
Personal Views (not a recommendation): The numbers tell a turnaround story, not a fully mature one yet. If revenue growth sustains and operating discipline holds, profitability can scale meaningfully. However, this remains a “prove-it” phase, where consistency matters more than one good half.
For long-term investors, this is a business to track closely for margin stability and repeat profitability, not just top-line growth.
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