IPO Size: Rs. 3,900 cr

• Fresh Issue of Rs. 2,080 cr (i) Rs. 760 cr IT and cloud infra (ii) Rs. 532 cr debt repayment (iii) Rs. 60 cr towards global expansion (iv) unidentified acquisition and general corporate purposes
• Offer for Sale (OFS) of Rs. 1,820 cr, by 10 financial investors including Mastercard, PayPal, Temasek, Peak, Sofina, with Invesco part-exiting 4 year old investment at 10% loss

Price band: Rs. 210-221 per share

M cap: Rs. 25,377 cr, implying 15% dilution

• Only 10% retail, as company reported loss for FY23 to FY25

IPO Date: Fri 7^th Nov to Tue 11^th Nov 2025, Listing Fri 14^th Nov 2025

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

Digital Payments & Pre-paid Cards Company

Pine Labs is an NCR-based payments company offering 18 lakh digital check-out points or point-of-sale terminals (enjoying ~20% market share) and pre-paid cards (22 cr cards issued, contributing to ~30% of revenue), the later through acquisition of Qwikcilver in 2019. Company serves 10 lakh merchants, 716 consumer brands and 177 financial institutions in India and Asia.

Reverse Flip for IPO

In June 2025, Pine Labs changed its domicile to India, from Singapore, a pre-cursor to this IPO. Company does not have an identifiable promoter, with just 3% stake held by directors and 1.3% by senior management. Balance over 95% stake is owned by investors, having invested in the company in ~12 different funding rounds in past 25 years history.

Another ‘New Age Fin-Tech’, but Same Old Loss-Making Venture

Barring the quarter just before the IPO, company has been loss-making. On FY25 revenue of Rs. 2,274 cr, loss before tax stood at Rs. 100 cr, despite Rs. 53 cr other income.

Even the Q1FY26 PAT of Rs. 5 cr was solely due to tax credit. On Pre-tax basis, loss before tax stood at Rs. 5 cr for Q1FY26, despite Rs. 37 cr other income. Thus, core business clocks roughly 7% net loss, despite scale and topline of Rs. 616 cr for first quarter.

In the past 6 years, company has made 6 acquisitions (average 1 per annum), leading to Rs. 1,160 cr in goodwill, as of 30.6.25, on Rs. 3,600 cr networth. If these acquisitions do not materialize as expected, this goodwill may come up for impairment in future.

Down-Round for a Reason

Mcap of Rs. 25,377 cr is lower than company’s valuation in the last funding round of 2022. But do not treat this down-round positively, as profitability has seriously deteriorated. From FY22 to FY25, net loss has tripled from Rs. 52 cr in FY22 to Rs.145 cr in FY25, despite revenue more than doubling to Rs. 2,270 cr, from Rs. 940 cr in FY22. Thus, no benefits of scale are visible.

Peer comparison is also immaterial as company’s own fundamentals are yet to be established, with no promoter, investor selling at loss, and rapidly evolving digital payments technology.  

If a company is in existence for quarter of a century, serving country’s top banks and retailers, yet making losses, one does require an expert to raise red flags. It is futile to ‘hope’ for turnaround, solely basis the gigantic opportunity in digital payments in India and overseas. Let the 25 year old business first get its P&L in order!

Drawing #investorcaution

In Sep 2025, secondary transactions were undertaken among individuals, between Rs. 302 to Rs. 315 per share. In last 2 months, these investors are already staring at 27% mark-to-market loss. Caution to potential IPO investors, besides highlighting the norm that unlisted market is not a ‘fair’ price discovery.