Digital payments service provider Pine Labs has filed preliminary papers with the market regulator Sebi to raise funds via an Initial Public Offering (IPO). The company is looking to raise Rs 2,600 crore through the issuance of fresh equity shares, as per the DRHP filed by the company.
Founded in 1998, Pine Labs is backed by venture capitalists and companies like Mastercard Asia/Pacific, Peak XV Partners, Actis, MW XO Digital Finance Fund Holdco, Lone Cascade LP, and PayPal.
As per the DRHP documents, along with the majority of the investors, Pine Labs’ co-founder Lokvir Kapoor will be divesting their shares in the fintech firm under the Offer For Sale. The company is looking to sell 14.78 crore shares by the investor selling shareholders under the Offer for Sale
Furthermore, the company plans a pre-IPO placement of shares aggregating to Rs 520 crore. If the pre-IPO placement is completed, the fresh issue size will be reduced.
How will Pine Labs utilise the proceeds?
Proceeds from the fresh issue to the tune of Rs 870 crore will be used by the company to repay debt, and Rs 760 crore will be used for investment in IT assets, expenditure towards cloud infrastructure, technology development initiatives, and procurement of digital checkout points.
The company will use funds worth Rs 60 crore for investment in its subsidiaries such as Qwikcilver Singapore, Pine Payment Solutions, Malaysia, and Pine Labs UAE for expanding the presence outside the country, and the balance for general corporate purposes, and unidentified inorganic acquisitions.
Noida-based Pine Labs is a technology company focused on digitizing commerce through digital payments and issuing solutions for merchants, consumer brands and enterprises, and financial institutions.
Pine Labs’ business and financials
For the fiscal year ended December 31, 2024, Pine Labs reported revenue from operations at Rs 1,208.2 crore and profit after tax at Rs 26.14 crore.
Furthermore, in FY24, the company has processed payments worth Rs 7,53,105 crore in gross transaction value and 3.97 billion transactions through its platforms. It had more than 9.15 lakh merchants, 666 consumer brands and enterprises, and 164 financial institutions, who used its platforms to enable transactions quickly, securely, and easily manage their business.
According to the Redseer report, Pine Labs is one of the top five in-store digital platforms and a prominent Bharat Bill Payment System transactions processing solutions provider in FY24.
The company competes with the likes of Paytm, Razorpay, Infibeam, PayU Payments, and PhonePe in the domestic market and Adyen, Shopify, and Block in the overseas markets.
Axis Capital, Morgan Stanley India Company, Citigroup Global Markets India, JP Morgan India, and Jefferies India are the book running lead managers, while KFin Technologies is the registrar for the IPO