Team Startupcity

• Pine Labs files DRHP with SEBI for a Rs 2,600 crore IPO via fresh issue and OFS.
• Major investors like Peak XV, PayPal, Mastercard, and Temasek to offload stakes.
• FY25 revenue rose 23% to Rs 1,208 crore; net profit at Rs 26 crore after previous year’s loss.

Fintech giant Pine Labs, based in Noida, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise Rs 2,600 crore through a combination of fresh issue of equity and offer for sale (OFS) of up to 147.8 million shares.

This is a milestone for one of India's oldest fintech companies founded in 1998 as it enters the league of listed digital payments behemoths like Paytm and Mobikwik. The shares will be listed on both NSE and BSE.

The OFS will witness some of the prominent shareholders selling their holdings, such as Peak XV Partners (earlier known as Sequoia Capital India), PayPal, Mastercard, Temasek's Macritchie Investments, Invesco, Actis, and Madison India. Pine Labs cofounder Lokvir Kapoor, together with top executives such as CEO Amrish Rau and Chief Business Officer Kush Mehra, will also sell shares.

According to the DRHP, Peak XV will sell the largest number of shares approximately 3.9 crore shares or 26.3% of OFS. PayPal will sell more than 1.15 crore shares, Temasek approximately 1.48 crore, and Mastercard approximately 1 crore. All these four shareholders have more than 5% holding in the company.

The DRHP also has a pre-IPO placement clause of Rs 520 crore, which will cut down the size of the fresh issue in case it is fully subscribed. Axis Capital, Citigroup, Morgan Stanley, J.P. Morgan, and Jefferies are book-running lead managers to the issue.

Pine Labs has recently brought its Singapore operations under its Indian entity as part of its IPO readiness. According to the company, the money raised through the fresh issue will be utilized for debt retirement, growth in Southeast Asia and West Asia, and technology and strategic acquisition investments. Specifically, Rs 60 crore is planned for going international, including crucial recruitment and upgrading its compliance-based technology platform.

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Financially, Pine Labs reported operating revenue of Rs 1,208 crore during the first nine months of FY25, an increase of 23% over Rs 982 crore in the same nine months a year ago. The company reported a net profit of Rs 26 crore, a big reversal of the Rs 151 crore loss a year ago. Operating expenses increased modestly to Rs 1,238 crore from Rs 1,205 crore.

As of December 2024, Pine Labs supported close to 9.15 lakh merchants, 666 consumer businesses and brands, and 164 financial institutions. The company handled Rs 7.5 lakh crore in transactions over this time period, up 68% from Rs 4.4 lakh crore the year before.