Pine Labs IPO: A Fintech Milestone

Indian fintech giant Pine Labs, known for its point-of-sale (POS) terminals, Buy‑Now‑Pay‑Later (BNPL) and merchant loyalty solutions, is now preparing for its long‑awaited initial public offering (IPO) in India. It has filed its Draft Red Herring Prospectus (DRHP) with SEBI, targeting a bold ₹2,600 crore (~$304 million) fresh issue, complemented by an Offer‑for‑Sale (OFS) of 14.78 crore equity shares from existing investors .

📊 Offer Structure & Fund Usage

Fresh Issue: ₹2,600 cr green-shoe, funding growth, technology, debt repayment

OFS: ~147.8 million shares from early backers like Peak XV (Sequoia India), PayPal, Mastercard, Temasek, Actis, Invesco, Madison India, and Pine Labs’ founders

Purpose of Funds:

Pay down up to ₹870 cr debt

₹60 cr to expand Southeast Asian and Middle Eastern subsidiaries

₹760 cr investment in cloud infrastructure, POS expansion, and broader tech initiatives

Remaining amount allocated to general corporate needs

 

📅 Timeline & Listing Plan

DRHP Filed: 25–26 June 2025

IPO Window: Final dates and price band yet to be announced; expected to open by August 2025

Listing: BSE and NSE

 

💰 Financial Snapshot

Revenue & Profit/Loss Trends

Based on FY22–24 data:

FY Revenue (₹ cr) Other Income (₹ cr) Total Income (₹ cr) PBT (₹ cr) Net Profit/(Loss) (₹ cr)

FY2022 9,339.8 239.4 9,579.2 –745.1 –226.2
FY2023 12,907.3 368.5 13,275.9 –748.0 –562.4
FY2024 13,410.1 416.2 13,826.3 –2,401.7 –1,871.7

 

Nine months ending Dec 2024

Revenue: ₹1,273.9 cr vs ₹1,006.6 cr YoY

Net Profit: ₹26.24 cr turning profitable vs loss of ₹151.6 cr year ago

Key Metrics (FY2022–24)

GTV (Platform Gross Transaction Value): ₹3,966.7 bn (FY24), up from ₹2,194 bn (FY22)

EBITDA Margin: Declined from 12.35% (FY22) to 9.67% (FY24)

Net Profit Margin: Widened loss—from –2.42% (FY22) to –13.96% (FY24)

 

🌱 Business Strengths

1. Largest Issuer of Gift‑Cards & Digital Credit: Dominates closed/semi-closed gift-card issuance; top 5 in-store digital payments in India

2. Robust Merchant Relationships: Partners with brands like Croma, HDFC Bank; platform serves ~915,700 merchants across 666 enterprises and 164 financial institutions as of Dec 2024

3. Tech‑First, API‑First Platform: Cloud-native, scalable infrastructure enabling rapid integration and customization

4. Strategic Acquisitions:

Acquired Mosambee (PoS) and Fave (SEA deals) to enter fintech and consumer space

 

 

⚠️ Risks & Challenges

Cash Flow Pressure: Operational cash flows limited (~₹355 cr in FY24), requiring external funds despite net profits

Margins Impacted by UPI Shift: Lower MDR on UPI payments squeezing core revenue

High Expenses: Opex moderated from ₹1,877 cr (FY23) to ₹1,622 cr (FY24), but still sizable

Competitive Landscape: Rivals include Paytm, PhonePe, Razorpay, CCAvenue, Shopify, Marqeta—offering overlapping digital payment and BNPL services

Global & Regulatory Risks: Overseas expansion (SEA and ME markets) bring geopolitical, compliance, and execution risks

 

🧠 Should You Subscribe?

Bullish Case

An emerging monthly revenue of ₹100 cr+ mid-2024

Growing merchant network and higher margins via value‑added services (BNPL, gift‑cards)

Tapping faster growth overseas—higher margins expected

Bearish Case

Wide losses and reliance on fundraising

Heavy competition and evolving Indian fintech regulations

Risk of IPO valuation being too high

 

🏁 Conclusion

Pine Labs’ IPO marks a pivotal moment for fintech in India—a digital infrastructure leader transitioning into public markets. For investors, it’s a bet on scaling POS + digital services in a rapidly digitising economy. Yet, questions over profitability, global execution, and market competition remain. The IPO’s final terms—price band, timing, valuation—will dictate whether it’s a value play or a stretch. If you’re bullish on India’s digital finance future and Pine Labs’ role in it, this IPO merits attention. Keep an eye out when dates and price band are announced!

8=*✅ Final Tips

Monitor SEBI announcements and stock exchange filings for price band and dates

Watch how price translates to valuation (₹50–70 k cr target valuation likely)

Assess your risk appetite: Are you comfortable with Finch losses and global execution?

 

 

📌 Disclaimer

This article is intended for informational and educational purposes only. The content presented here does not constitute financial advice, investment recommendations, or a solicitation to invest in any IPO, including Pine Labs. Readers are advised to consult with a certified financial advisor or do their own research before making any investment decisions. The accuracy of financial data is based on publicly available sources as of the date of publication and may change over time. The author and briefsetup.com are not liable for any loss or damage arising directly or indirectly from the use of the information provided in this blog.