Pine Labs Seeks Rs 2,600 Crore IPO Funds to Repay Debt, Invest in Global Growth

We missed this earlier: Financial technology company Pine Labs filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), offering fresh shares worth Rs 2,600 crore and an offer for sale of equity shares worth Rs 14.78 crore.

Among its shareholders, Peak XV Partners will offload shares worth Rs 3.89 crore, followed by Actis Pine Labs Investment Holdings and Machritchie Investments, which will sell shares worth Rs 1.49 crore and Rs 1.48 crore, respectively. Further, PayPal and Mastercard Asia/Pacific will unload shares worth Rs 1.15 crore and Rs 1 crore, respectively.

Background

This isn’t the first time the digital payments provider has tossed its hat into the Initial Public Offering (IPO) ring. In 2022, Pine Labs took the confidential IPO route through a filing with the US Securities and Exchange Commission. Later, the company deferred its proposal for public listing in the US to 2024. However, Pine Labs soon switched its plans and in May 2024, received approval to reverse flip to India by a Singapore Court. In June 2025, The Economic Times reported that the fintech is aiming for a Rs 6,000 crore IPO by the month-end.

Speaking of its offerings, Pine Labs delves into two services—Digital Infrastructure & Transaction Platform and Issuing & Acquiring Platform. While the former includes online and in-store infrastructure, fintech solutions, and integrated affordability, the latter enables consumer brands to create prepaid products to drive sales. Currently, its operations span across India, Malaysia, the UAE, Singapore, Australia, the US, and Africa.

ownership structure

Name of Shareholder	Percentage of shareholding
Peak XV Partners	20.4%
Macritchie Investments	7.1%
PayPal	6%
Actis Pine labs Investment	5.8%
Mastercard Asia/Pacific	5.2%
Alpha Wave Ventures	3.4%
AIM Investment Funds	2.8%
Maidson India Opportunities	2.7%
Lone Cascade	2.4%
Amrish Rau	2.4%

How will the IPO proceeds be used?

The company contends that the net proceeds will be deployed for the following business needs:

• Repayment and prepayment of loans and borrowings by the company and its subsidiaries (Synergistic and Cashless Technologies). Pine Labs will utilise Rs 870 crore for this purpose.
• Investment in subsidiaries like Qwikcilver Singapore, Pine Payments Solutions Malaysia and Pine Labs UAE to increase its global presence. It plans to allocate Rs 60 crore for this purpose.
• Investment in IT assets, cloud infrastructure, technology development, and procurement of digital checkout points (DCP). The company will require Rs 760 crore for this purpose.
• General corporate purposes and unidentified inorganic acquisitions, the amount for which hasn’t been specified.

Key metrics: How is the company faring?

1. Assets and liabilities: As of December 2024, the company holds non-current assets worth Rs 1,515.8 crore and current assets worth Rs 7,454.2 crore. Conversely, it faces liabilities of Rs 6,917.7 crore.
2. Income and expenses: The company also reported expenses worth Rs 1,622.8 crore in 2024. This included transaction and related costs, purchases of stock-in-trade, changes in inventories of stock-in-trade, finance costs, and employee benefits expenses, among others. Meanwhile, it reported a total income of Rs 1,382.6 crore during that period.
3. Revenue: In the first nine months of FY25, the company grew its revenue by 23% year-over-year (YoY) to Rs 1,208.2 crore. As per the DRHP, the revenue arises from in-store payments from merchants and acquiring banks via subscription fees on DCPs. For online payments, it receives fees from merchants depending on the value of transactions processed. Concerning the affordability, VAS services, issuing & acquiring platform, it earns from processing fees based on Gross Transaction Value (GTV) processed.
4. Operational metrics: Coming to operational metrics, the company services 9.15 lakh merchants, 666 consumer brands, and 164 financial institutions as of December 2024. Further, it issued 1.39 million DCPs and 529 million prepaid cards in FY24, up from 1.19 million DCPs and 495.15 million cards in FY23. Overall, in FY24, Pine Labs processed a total of 3.44 billion transactions, of which 7.3% were fintech infrastructure transactions.

What risk factors did the company outline?

repeat losses

The company reported losses of Rs 187.2 crore in FY24, Rs 56.2 crore in FY23, and Rs 22.6 crore in FY22. It attributed these losses to factors like investments in the acquisition of partners, including merchants, financial institutions, etc and of products & technologies brands like Qwikcilber, Mosambee, QFix, Setu, and Credit+. Besides this, international expansion and capital expenditure in the DCP network added to its losses. Overall, greater investments and scaling efforts may increase the company’s losses in the future.

Unauthorised use of IP

The company also acknowledged its potential inability to prevent unauthorised use of its intellectual property (IP) and vice versa, commit infringement or violate others’ IPs. As of June 2025, Pine Labs has 120 registered trademarks and 25 active domains. In 2019, the company was subject to an infringement lawsuit by Innoviti Payment Solutions based on its product “PlutusSmart”, through which it authorised dynamic QR transactions. While a civil court sided with the petitioner, the Karnataka High Court quashed its application for a temporary injunction, citing a lack of evidence. However, the application is pending, and the fintech has filed a caveat application before the Supreme Court against any impending order of the Karnataka High Court.

legal actions

Speaking of other legal actions, the company faces nine outstanding tax proceedings amounting to Rs 493.4 crore against itself and four such proceedings worth Rs 24.3 crore against its subsidiaries. Consequently, adverse rulings in these cases or imposition of penalties could increase expenses, current, or contingent liabilities.

regulatory compliance

Pine Labs explains that its prepaid and online businesses must obey the anti-money laundering requirements of the particular jurisdictions it operates in. Similarly, it should adhere to counter-terrorist financing and economic sanction laws prohibiting engagements with the U.S. Department of the Treasury of Foreign Assets Control (OFAC). Accordingly, in 2025, Qwikcilver suspended operations with the Yemen Kuwait Bank for Trade and Investment, which found its place on the OFAC’s list of specially designated individuals and blocked persons.

Speaking of India, Pine Labs must adhere to the Prevention of Money Laundering Act (PMLA), 2002. It explains that any non-allegiance with the aforementioned laws could result in financial penalties, enforcement actions, and regulatory sanctions that may impact the business, its reputation, and financial conditions.

competitive intensity

With significant investment in the fintech sector, Pine Labs could face growing competition in the upcoming years. Rivals could turn to tactics like aggressive pricing, incentives, and free products like free DCPs, thereby increasing pricing pressure. Alternatively, larger rivals could offer diversified products, service broader consumer & merchant bases, and leverage extensive distribution networks, cross-selling capabilities, and greater transaction data, providing them a competitive advantage.

cybersecurity and other breaches

The company contends that its reliance on digital technologies could expose it to cyberattacks, security breaches, and other sources of disruption. In 2021, an authorised actor infiltrated Pine Labs’ systems, copied bank billing data, credit card numbers, and other sensitive information. This incident was reported to the Reserve Bank of India (RBI) and the Indian Computer Emergency Response Team (CERT-IN), with appropriate remedial measures being taken. Later, in 2022, the company encountered another cybersecurity incident. Notably, since it processes personal identifiable information (PII) of consumers, any unintended exposure of such information could lead to litigation and negative publicity.

chargeback risks and fraudulent transactions

The company explained that it also faces chargeback risks arising from billing disputes and unauthorised transactions. Consequently, if Pine Labs’ internal risk and transaction monitoring systems fail to detect suspicious activities, the company would be liable for losses payable to the cardholder. Speaking of fraudulent transactions, Pine Labs services are susceptible to improper or illegal uses, like terror financing and money laundering.

reliance on third-party infrastructure

Pine Labs sources its hardware devices, including DCPs and key software services, via foreign third-party suppliers. This reliance could give way to currency fluctuations, import/export issues, climatic conditions, geopolitical risks, etc, that could delay or limit its product supply. Similarly, third-party vendors also provide cloud computing providers, telecommunication service providers, and other technical support to the platform. However, repeated failures on their part could impede experiences for Pine Labs’ merchants and vendors. In FY24, the company shelled out Rs 1,47.5 crore or 9% of its total expenses on its top five vendors.

Besides this, the company relies on acquiring banks for its operations and any hindrance in their relationships could impact the business. To explain, Pine Labs depends on acquiring processors to accept and process payment instruments like credit and debit cards, wallets, and UPI, with acquiring banks providing the technical linkage between them and card networks connected with issuing banks.

credit risks in instant and early settlements

Since the fintech operates escrow accounts for fund settlement for its merchants, the Payment Aggregator and Payment Gateway (PA/PG) Guidelines direct it to ensure that the day-end closing balance in escrow accounts is not lower than the value of all outstanding amounts due to merchants. However, failure to do so would cause disruptions, impact the brand and its reputation, alongside penalties like monetary fines and loss of license.

reliance on open source software

The company acknowledged that certain aspects of its business are governed by open source licenses. Since such licenses don’t provide warranties or contractual protections concerning infringement and misappropriation, the risks (security vulnerabilities and defects) associated with such software lie outside the company’s purview and cannot be eliminated instantaneously.

data localisation requirements could increase the compliance burden

Within the jurisdictions it operates in, data localisation requirements could proliferate data centre operating costs or warrant changes to products and solutions. In 2018, the RBI mandated data localisation for PSOs about the storage of payment system data. Further, according to the draft Digital Personal Data Protection (DPDP) Rules 2025, entities transferring personal data abroad should abide by certain regulations and ensure that certain personal data specified by the Central Government is solely hosted in India.

concerns flagged by auditors

The company also acknowledges certain shortcomings highlighted by auditors in their reports on the consolidated financial statements. The auditor’s report for the Fiscal Year 2024 noted that the company and its subsidiaries did not fully comply with the audit trail requirements for certain accounting software, which impacted the auditors’ ability to comment on the completeness and functionality of the audit trails for various systems used in revenue and payroll processes. In the FY23 report, auditors claimed that the company failed to maintain adequate internal financial controls concerning its consolidated financial statements.

employee attrition

Finally, the company faced overall attrition rates of 39.2% in FY24 and recorded a loss of key management personnel. Recently, Pine Labs CFO Marc Mathenz and CBO Sudarshan Naganath Kumar resigned from the company.

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