Fintech firm Pine Labs’s upcoming initial public offering (IPO) will see several of its investors and one co-founder partially exit their holdings, according to its draft red herring prospectus (DRHP) filed on Thursday. The company plans to raise Rs 2,600 crore through a fresh issue of shares, and in addition to the primary capital raise, a group of existing shareholders, including Peak XV, Temasek, Mastercard, PayPal, and others, are collectively offering to sell up to 147.8 million shares via the offer for sale (OFS) route.
The other selling shareholders are global investment firm Actis, US fintech giant PayPal, Macritchie Investments (a subsidiary of Temasek), Invesco, PE firm Madison India Capital, MW XO Digital Finance Fund Holdco, US-based hedge fund Lone Pine Capital’s Lone Cascade, and Lightspeed Venture Partners.
Besides them, co-founder Lokvir Kapoor, MD and CEO Amrish Rau, and Kush Mehra, executive director, president, and CBO, will also sell part of their holdings. Kapoor has a 1.97% stake in the company, while Rau holds 2.35% and Mehra holds 0.43%.
Peak XV is set to be the largest seller in the issue. The firm holds a stake of 20.35% and is looking to sell up to 39 million shares, which could reduce its stake by up to 3.6%. Peak is followed by Actis, which is looking to sell up to 14.9 million shares, which could pare its 5.78% stake by up to 1.4%.
Temasek, which has a 7.1% stake in the company, is also looking to sell up to 14.8 million shares, which could reduce its stake by up to 1.4%. PayPal is looking to sell up to 11.5 million shares in the IPO, which could also reduce its 6% stake by about a per cent. Meanwhile, Invesco is looking to sell up to 5.4 million shares, which could reduce its 2.84% stake by 0.5%.
Among the investors, Peak XV stands to benefit the most, with a weighted average acquisition cost of Rs 5.60 per share. In contrast, Actis’ cost stands at Rs 71.43 a share, Temasek’s at Rs 76.67, PayPal’s at Rs 77.78, and Invesco’s at Rs 243.89.
The discrepancy in entry prices means Peak XV’s exit value per share is about 43.5 times that of Invesco, and even outpaces other investors by a significant margin.
Pine Labs plans to use the majority of proceeds from the IPO to repay or prepay, in part or in full, about Rs 870 crore of its borrowings. It also plans to invest in its subsidiary Qwikcilver Singapore, Pine Payment Solutions, Malaysia, and Pine Labs UAE. Some of the proceeds will also be invested in upgrading its IT assets, cloud infrastructure, procurement of digital check-out points, and other corporate expenses.
The company also turned profitable in the nine months ended December 2024, with a net profit of Rs 26.1 crore, compared to a loss of Rs 187 crore in the entire FY24. The company reported a revenue from operations of Rs 1,208.2 crore in the nine months of FY25, compared to Rs 1,341 crore in FY24.
During this period, it processed payments worth Rs 7.5 lakh crore in terms of gross transaction value through 3.97 billion transactions on its platforms.
Axis Capital, Morgan Stanley India, Citigroup Global Markets India, JP Morgan India, and Jefferies India are the book-running lead managers to the IPO.