Pine Labs Files DRHP With SEBI for ₹2,600 Cr IPO

Fintech unicorn Pine Labs has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on June 26, moving ahead with plans for a public listing on Indian exchanges. The company intends to raise ₹2,600 crore (approximately $304 million) through a fresh issue of shares, while existing shareholders will offload up to 14.78 crore equity shares via an Offer for Sale (OFS).

According to the DRHP, proceeds from the primary issuance will be used to repay or prepay borrowings worth around ₹870 crore. Funds will also be allocated to investments in subsidiaries - Qwikcilver Singapore, Pine Payment Solutions Malaysia, and Pine Labs UAE - as well as towards enhancing cloud infrastructure, procuring digital checkout solutions, upgrading IT assets, and general corporate purposes. The company may also explore a pre-IPO placement of shares worth up to ₹520 crore, subject to regulatory and board approvals.

The issue is being managed by a consortium of leading investment banks including Axis Capital, Morgan Stanley India, Citigroup Global Markets India, J.P. Morgan India, and Jefferies India, who are acting as book-running lead managers.

This IPO marks a sharp strategic pivot for Pine Labs, which had been reportedly exploring a $1 billion (₹8,300 crore) overseas listing since last year. The company was last valued at $5 billion in its 2022 funding round, and in April 2024, received approval to shift its domicile from Singapore to India in preparation for this domestic offering.

A large group of existing shareholders will participate in the OFS. These include Peak XV Partners, Temasek’s Macritchie Investments, Actis, PayPal, Mastercard, Invesco, Madison India Capital, Lightspeed Venture Partners, MW XO Digital Finance, and Lone Pine Capital’s Lone Cascade. Among these, Peak XV Partners is expected to be the largest seller, offering up to 39 million shares, potentially reducing its 20.35 percent holding by 3.6 percent. Actis and Temasek will each offload approximately 14.8–14.9 million shares, trimming their stakes by around 1.4 percent.

PayPal, which currently owns 6 percent of Pine Labs, will sell up to 11.5 million shares, reducing its stake by about 1 percent, while Invesco will offload 5.4 million shares, cutting its 2.84 percent holding by 0.5 percent. Members of the leadership team, including co-founder Lokvir Kapoor, MD & CEO Amrish Rau, and President & CBO Kush Mehra, will also partially divest their personal stakes, which currently stand at 1.97 percent, 2.35 percent, and 0.43 percent respectively.

Among investors, Peak XV Partners is poised to generate the highest return, with a weighted average acquisition cost of ₹5.60 per share. In contrast, Actis acquired its stake at ₹71.43 per share, Temasek at ₹76.67, PayPal at ₹77.78, and Invesco at ₹243.89. Peak XV’s estimated exit value is approximately 43.5 times greater than Invesco’s, significantly outperforming all other early investors in terms of capital gains.

In terms of financial performance, Pine Labs reported a net profit of ₹26.1 crore in the nine months ending December 2024, compared to a net loss of ₹187 crore in FY24, indicating a major turnaround. Revenue from operations during 9 months ending December 2024 stood at ₹1,208.2 crore, compared to ₹1,341 crore in the full FY24. The company processed ₹7.5 lakh crore in gross transaction value (GTV) across 3.97 billion transactions, demonstrating strong scale and throughput in its merchant payment ecosystem.

Best known for its leadership in offline Point-of-Sale (PoS) solutions, Pine Labs has expanded its footprint across online payments via Fave, Buy Now Pay Later (BNPL) offerings, invoice management tools, and gifting and loyalty platforms aimed at merchants. These diversification efforts are intended to create multiple revenue streams and deepen client engagement.

Pine Labs' IPO is one of the most closely watched listings in India’s fintech sector and could serve as a bellwether for broader investor sentiment in tech-led financial services.

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