Pine Labs is an NCR-based Indian fintech company that provides a range of digital payments and merchant commerce solutions. These include integrated points of sale (PoS) solutions for merchants to accept credit and debit card payments, stored value card solutions, and other e-payment solutions, as well as financing tools and SaaS-based business management services. With a strong technology infrastructure and deep relationships with financial services firms, it serves a wide range of customers, enabling seamless transactions. The company has witnessed robust growth and received backing from global private equity and venture capital firms. The IPO consists of a fresh issue and an offer for sale component.
Offer details of the IPO
- Total Offer Size – The total size of the issue is INR 3,899.91 crore. It comprises a fresh issue of equity shares worth up to INR 2,080 crore together with an offer for sale of up to INR 1,819.91 crore.
- The shares being sold by the existing shareholder are held by:
- Peak XV Partners Pine Investment Holdings (Investor) – 23,002,308 Equity Shares
- Actis Pine Labs Investment Holdings Limited (Investor) – 8,808,097 Equity Shares
- Macritchie Investments Pte. Ltd. (Investor) – 8,747,787 Equity Shares
- PayPal Pte. Ltd. (Investor) – 6,786,963 Equity Shares
- Mastercard Asia/Pacific Pte. Ltd. (Investor) – 5,925,004 Equity Shares
- Madison India Opportunities IV (Investor) – 3,018,784 Equity Shares
- Lone Cascade, L.P. (Investor) – 2,413,491 Equity Shares
- Lokvir Kapoor (Founder) – 2,221,277 Equity Shares
- Sofina Ventures S.A. (Investor) – 1,998,359 Equity Shares
- AIM Investment Funds (Invesco Investment Funds) (Investor) – 3,212,971 Equity Shares
Price Band: INR 210 to INR 221 per Equity Share
Book Running Lead Managers (BRLMs)
- Axis Capital Limited
- P. Morgan India Private Limited,
- Jefferies India Private Limited,
- Morgan Stanley India Company Private Limited
- Citigroup Global Markets India Private Limited.
Digital Payments and Merchant Technology Industry – Overview
The digital payments and merchant technology space in India is witnessing a rapid evolution as a result of government-led initiatives, surging smartphone penetration, growing digital acumen and the morphing preferences of the Indian consumer towards going cashless. At its heart, it includes digital infrastructure providers that provide seamless payment acceptance, transaction processing and financial services integration to merchants of all sizes – from very large enterprises to micro-merchants.
The industry is broadly segmented into four key verticals based on merchant size and operational complexity:
Table: Key segments
| Category | Description | Key Highlights |
| Large Enterprises | There are fewer than 3000 companies in India which are generally multi-location retailers, chains and corporates with high volumes. | They demand comprehensive and scalable solutions from ERP integration to advanced analytics, loyalty programs and multi-channel payment acceptance. Digital Checkout Points are deployed at nearly 100% based on operational efficiency and a customer experience perspective.
|
| Mid-Market Businesses | These have moderate-sized transaction volumes and are regionally important stores/service providers. | They focus on affordable and easy-to-embed solutions like automated reconciliation tools, simplified reporting, and low-cost payment gateways for consumers. They are in the process of digitising their films and taking on more DCPs. |
| MSMEs (Micro, Small & Medium Enterprises) | Being the largest segment in terms of volume (more than 90% of all merchants), MSMEs are comprised of local stores, restaurants and service providers. | Having been traditionally underbanked, this segment is for the first time inducted into the formal digital economy via low-cost, plug-and-play DCPs, integrated with UPI and easier onboarding. Adoption is picking up because of policy impetus as well as ecosystem enablers like QR-based payments. |
| Smaller Merchants & Informal Sector | Street vendors, kirana stores and individual service providers are part of it. | This was cash-centred in the past. But, it is now being served through ultra-low cost mobile first solutions like NFC devices, IPMS (Voice or SMS-based payments) and Agent Networks. Growth here is driven by campaigns for financial inclusion and the growth of digital infrastructure. |
Source: RHP
Table: Industry Growth Rates (Past & Future) and Commentary
| Segment | Past CAGR (FY 2020–2025) | Projected CAGR (FY 2025–2029P) | Comment |
| Digital Infrastructure & Transaction Platform | 20% | 15–18% | Robust historical growth from the deployment of DCP, integration with UPI and enterprise digitisation. While growth will slow as penetration increases, it remains strong given increasing transaction volumes and add-on services (e.g., credit, analytics). |
| Issuing & Acquiring Platform | 22% | 18–20% | Robust historical growth from the deployment of DCP, integration with UPI and enterprise digitisation. While growth will slow as penetration increases, it remains strong given increasing transaction volumes and add-on services (e.g., credit, analytics).. |
| Overall Industry (Combined) | 20% | 16–18% | India’s digital payments landscape is expected to grow to almost double from ₹11.1 trillion in FY 2025 to ₹20-21 trillion by FY 2029. Although CAGRs are on a moderate trend, absolute growth is massive given the scale of operations prevalent. MSMEs and the unorganised sector’s digitisation will take the lead in the medium-term rise. |
Source: RHP
Takeaways
- The digital payments sector has posted impressive growth in the past, driven by DCP roll-out, UPI adoption and enterprise digitisation.
- The Issuing & Acquiring Platforms in particular expanded quickly in prepaid instruments, co-branded cards, and merchant financing, where there are high-margin opportunities.
- Medium-term growth outlook is strong: DITP at 15-18% CAGR and IAP at 18-20% CAGR over FY21–24E were retained on firm transaction volumes, robust BAM capacities and BNPL potential, keeping SME lending in focus.
- India’s digital payment ecosystem will grow by over two-fold, from ₹11.1trillion in FY2025 to about ₹20–21trillion in FY2029, and micro-small-medium enterprises (MSMEs) and informal digitisation are set to be the drivers of growth.
Pine Labs Limited – Overview
Pine Labs Limited is an Indian merchant platform company that provides financing and last-mile retail transaction technology. It was founded by Rajul Garg and Tarun Upadhyay in 1998 in Noida, Uttar Pradesh. The company has expanded its business to Southeast Asia (Malaysia, Indonesia, Vietnam, Thailand, Philippines) and the United States through subsidiaries or joint ventures. It counts more than 690,000 merchants as its users and works with large financial institutions and consumer brands.
Strategic Partnerships:
- Financial Institutions: Collaboration with banks and NBFCs allows Pine Labs to provide merchant financing and credit facilities.
- Consumer Brands & Enterprises: enables co-branded loyalty and payment programs by teaming up with both retail as well e-tail brands..
- Technology Providers: Relationships with cloud infrastructure and AI partners that broaden platform scalability and fraud detection capabilities.
Competitive Positioning
Pine Labs Limited is a leading Indian merchant-focused fintech platform that provides integrated end-to-end e-commerce solutions, serving ~700000 merchants across India and South East Asia. It has strategic partnerships with technology providers, which allow for scalable, reliable and innovative payment solutions. With a vertically integrated platform covering payments, financing, loyalty, and analytics, Pine Labs differentiates itself from competitors and holds a strong position in the rapidly growing digital commerce market.
Advantages:
- Unified Commerce Platform: Vertically integrated platform for payment acceptance, financing, analytics, retail network management and loyalty that eliminates merchant friction inherent in the current payments ecosystem.
- Formidable Merchant Network: With more than 690,000 merchants and a strong presence in Tier 2/3 cities, there are several competitive advantages.
- Technology and Innovation: Patented AI-powered fraud prevention, real-time data analytics and universal (omnichannel) payment routing.
- Regulatory compliance and trust: SEBI-regulated entity complying with stringent financial reporting and governance standards
Weaknesses:
- Profitability Challenges: Losses in key international subsidiaries affect overall profitability.
- High Operating Expenses: Expansion, technology, and customer acquisition costs are rising, risking operating leverage if revenue slows.
- Customer Retention Risk: Short notice periods on merchant contracts and attrition increase churn risk.
- Platform Reliability Risks: System outages, software bugs, or cybersecurity incidents could harm reputation and incur penalties.
Financial Profile
Robust Revenue Growth: Pine Labs Limited’s revenue rose from ₹15,977 mn in FY 2023 to ₹22,743 mn in FY 2025 (+19.3% CAGR). Q1 FY 2026 revenue reached ₹6,159 mn (+17.9% YoY). DITP contributed 70.5% of revenue, driven by higher transaction volumes, merchant expansion, and subscription services, while IAP grew via prepaid card issuance and interest income. The Top 5 customers accounted for 22.3% of revenue, with the largest customer contributing 10.62%.
Table: Drivers of revenue growth
| Segment | Q1 FY2026 Revenue (₹ million) | Key Drivers |
| Digital Infrastructure & Transaction Platform (DITP) | 4,343.71 | · Increased transaction volumes across merchant acquiring, fintech infrastructure (UPI, account aggregation, credit enablement via Setu and Credit+), and affordability solutions;
· Expansion of merchant ecosystem with DCPs and growing merchant base; · Subscription and value-added services (VAS) from enterprise clients and financial institutions leveraging APIs and embedded finance tools |
| Issuing & Acquiring Platform (IAP) | 1,815.39 | · Prepaid card issuance and processing fees, including breakage income;
· Interest income on customer-held funds, partially offset by high purchase of stock-in-trade (₹898.50 mn) for funding prepaid card balances and similar liabilities |
Source: RHP
Better Profitability: Pine Labs narrowed net loss from ₹3,418.62 mn in FY 2024 to ₹1,454.87 mn in FY 2025. Contribution margin improved to 75.9% of revenue in FY 2025 and 77.9% in Q1 FY 2026. High costs-employee benefits, depreciation, transaction fees, and stock-in-trade-remain a challenge. Q1 FY 2026 showed a reported profit of ₹47.86 mn due to a one-time gain, while underlying operations stayed loss-making.
Table: Peers Comparison
| Name of the company | Revenue from operations (₹ in Million) | P/E ratio | EPS (Basic) (₹ per share) | EPS (Diluted) (₹ per share) | NAV per equity share (₹) |
| Pine Labs Limited | 22,742.74 | 152.41* | (1.45) | (1.45) | (22.43) |
| India listed Peers | |||||
| One97 Communications Limited (“Paytm”) | 69,004.00 | (110.98) | (10.35) | (10.35) | 235.54 |
| Zaggle Prepaid Ocean Services Limited (“Zaggle”) | 13,037.57 | 48.87 | 6.99 | 6.96 | 99.25 |
| Global listed Peers | |||||
| Adyen N.V. (“Adyen”) | 229,236.90 | 46.23 | 3,058.07 | 3,047.77 | 13,987.40 |
| Shopify Inc. (“Shopify”) | 754,800.00 | 96.50 | 133.45 | 131.75 | 761.60 |
| Block, Inc. (“Block”) | 2,050,289.51 | 16.10 | 399.50 | 387.60 | 2,925.70 |
| Marqeta, Inc. (“Marqeta”) | 43,094.58 | 101.20 | 4.25 | 4.25 | 180.20 |
Source: RHP; * – based on upper end of price band
Table: KPI Comparison
| Company | KPI (Unit) | FY23 | FY24 | FY25 | CAGR |
| Indian Listed Peers | |||||
| Pine Labs
|
Revenue from Operations (₹ Mn) | 15,976.58 | 17,695.46 | 22,742.74 | 20% |
| Digital Infrastructure & Transaction Platform Revenue (₹ Mn) | 11,524.02 | 12,764.33 | 16,032.27 | 19% | |
| Issuing & Acquiring Platform Revenue (₹ Mn) | 4,452.56 | 4,931.13 | 6,710.47 | – | |
| Contribution Margin / Profit (₹ Mn) | 12,810.37 | 13,853.85 | 17,288.83 | 17% | |
| Contribution Margin as % of Revenue | 80.18% | 78.29% | 76.02% | – | |
| Adjusted EBITDA (₹ Mn) | 1,967.95 | 1,582.01 | 3,567.16 | 34% | |
| Adjusted EBITDA Margin (%) | 12.32% | 8.94% | 15.68% | – | |
| Paytm
|
Revenue from Operations (₹ Mn) | 79,903.00 | 99,778.00 | 69,004.00 | –7% |
| Digital Infrastructure & Transaction Platform Revenue (₹ Mn) | 48,440.00 | 61,280.00 | 38,790.00 | –10% | |
| Contribution Margin / Profit (₹ Mn) | 39,000.00 | 55,380.00 | 36,780.00 | –3% | |
| Contribution Margin as % of Revenue | 48.81% | 55.50% | 53.30% | – | |
| Adjusted EBITDA (₹ Mn) | (1,760.00) | 5,590.00 | (6,910.00) | – | |
| Adjusted EBITDA Margin (%) | (2.20)% | 5.60% | (10.00)% | – | |
| Zaggle
|
Revenue from Operations (₹ Mn) | 5,534.60 | 7,755.98 | 13,037.57 | 56% |
| Adjusted EBITDA (₹ Mn) | 625.10 | 855.70 | 1,233.53 | 42% | |
| Adjusted EBITDA Margin (%) | 11.29% | 11.03% | 9.46% | – | |
| Global Listed Peers | |||||
| Company | KPI (Unit) | CY22 | CY23 | CY24 | CAGR |
| Adyen
|
Revenue from Operations (₹ Mn) | 920,367.93 | 191,930.82 | 229,236.90 | –36% |
| Gross Profit (₹ Mn) | 137,007.10 | 167,484.29 | 205,595.62 | 23% | |
| Gross Margin (%) | 14.89% | 87.26% | 89.69% | – | |
| Adjusted EBITDA (₹ Mn) | 75,013.66 | 76,532.61 | 102,207.72 | 17% | |
| Adjusted EBITDA Margin (%) | 55.00% | 39.88% | 44.59% | – | |
| Block
|
Revenue from Operations (₹ Mn) | 1,490,184.90 | 1,862,827.96 | 2,050,289.51 | 17% |
| Gross Profit (₹ Mn) | 509,310.82 | 637,915.31 | 755,568.06 | 22% | |
| Gross Margin (%) | 34.18% | 34.24% | 36.85% | – | |
| Adjusted EBITDA (₹ Mn) | 84,231.94 | 152,355.70 | 257,467.64 | 57% | |
| Adjusted EBITDA Margin (%) | 5.65% | 8.18% | 12.56% | – | |
| Marqeta
|
Revenue from Operations (₹ Mn) | 63,597.51 | 57,474.54 | 43,094.58 | –18% |
| Gross Profit (₹ Mn) | 27,200.09 | 28,008.69 | 29,907.17 | 5% | |
| Gross Margin (%) | 42.77% | 48.73% | 69.40% | – | |
| Adjusted EBITDA (₹ Mn) | (3,552.15) | (194.65) | 2,472.91 | – | |
| Adjusted EBITDA Margin (%) | (5.59)% | (0.34)% | 5.74% | – | |
| Shopify
|
Revenue from Operations (₹ Mn) | 475,988.44 | 600,100.00 | 754,800.00 | 26% |
| Gross Profit (₹ Mn) | 234,100.12 | 298,775.00 | 380,120.00 | 27% | |
| Gross Margin (%) | 49.18% | 49.79% | 50.36% | – | |
Source: RHP