Should You Subscribe to the Pine Labs IPO? Review, GMP, and Key Metrics Explained

Pine Labs is one of India’s biggest financial technology (FinTech) companies that helps stores, brands, and banks handle digital payments smoothly, whether you tap your card in a shop or make an EMI purchase for a new phone.

Its IPO is open from November 7 to November 11, 2025, with a price band of ₹210-₹221 per share and a total issue size of ₹3,899.91 crore. The GMP is around ₹12, which shows a 5.43% gain over the issue price. (Note: GMP is an unofficial indicator and can change anytime.)

In this article, we’ll break down Pine Labs’ business model, explore why it is launching this IPO, where it plans to use the money, its strengths, risks, financials, and leadership story, so you can understand this IPO you step by step.

IPO Overview

• IPO Date: November 7 to November 11, 2025
• Total Issue Size: ₹3,899.91 crore
• Price Band: ₹210 to ₹221 per share
• Minimum Investment: ₹14,807
• Lot Size: 67 Shares
• Tentative Allotment Date: November 12, 2025
• Listing Date: November 14, 2025 (Tentative)
• GMP: The GMP for Pine Labs’ IPO is ₹12, reflecting a 5.43% gain over the issue price, according to Chittorgarh.com.

Disclaimer: GMP is an unofficial indicator and is subject to market volatility.

Business Model: How Pine Labs Makes Money

Pine Labs is like a digital power grid for the Indian shopping world. It doesn’t make the “electricity” (money or loans), but it builds and maintains the “wires and meters” (devices and software) that connect shops, banks, brands, and customers.

Pine Labs earns money through two main divisions:

Digital Store Helpers

• This is where Pine Labs provides the checkout machines (called Digital Check-out Points or DCPs) you see at stores.
• These machines help shops accept all types of payments, including cards, wallets, or UPI. Stores pay a regular subscription fee for these devices.
• Pine Labs also acts as a “matchmaker” between brands, banks, and customers, enabling Affordability Solutions (like EMIs on your purchases). The company earns fees from whichever partner, bank, brand, or shop benefits from the transaction.
• It also sells software tools to help stores manage billing, stock, and loyalty points.

Card & Gift Card Makers

• This division builds the backbone technology that helps banks issue debit, credit, or prepaid cards.
• Pine Labs also helps companies design and manage gift cards and employee reward cards. So, if you get a brand-specific gift card, Pine Labs’ system likely powers it behind the scenes.
• In FY25, Pine Labs processed a whopping ₹11.42 trillion in transactions across 568 crore transactions, working with 9.88 lakh merchants, 716 brands, and 177 financial institutions.
• That’s like powering almost every digital payment pulse in India—reliably and quietly.

Objectives of the IPO

1. Debt Repayment – ₹532 crore: Pine Labs plans to repay part of its loans from Axis Bank and Citibank. This will reduce interest costs and make the balance sheet stronger. Currently, its total borrowings are around ₹888 crore, or roughly one-fourth of its total equity.
2. Technology and Device Investment – ₹760 crore: The company will spend big on new devices and tech, including ₹230 crore for cloud infrastructure and IT systems, ₹430 crore for more DCP terminals and soundboxes to expand into smaller stores, and ₹100 crore for AI and data-driven technology to personalize services for shoppers.
3. International Expansion – ₹60 crore: Some funds will be used to grow in Malaysia, Singapore, and the UAE by upgrading local tech infrastructure and hiring teams.
4. General Corporate Purposes and Future Acquisitions: The rest of the funds are for everyday business needs, like leases, employee costs, or potential acquisitions to expand faster.

Strengths:

• Massive Reach and Scale: With over 9.88 lakh merchants and 18.4 lakh payment devices, Pine Labs already works at a national scale. This large setup makes it difficult for new competitors to catch up.
• Strong Operating Efficiency: The company has an impressive Contribution Margin of 76% in FY25, meaning it earns ₹76 from every ₹100 in revenue after covering service costs.
• Improved Profit Trend: Pine Labs cut its losses from ₹265 crore in FY23 to ₹145 crore in FY25 and even turned a small net profit of ₹4.8 crore in Q1 FY26 (thanks to higher efficiency and some tax credits).
• High-Growth Digital Ecosystem: Its transaction volume grew 118% year-on-year in Q1 FY26, proving that merchants and customers are using its platforms more often.

Risks:

• Still Loss-Making Overall: Even with improvements, Pine Labs posted a loss of ₹145 crore in FY25. That means profitability is new and not guaranteed yet.
• Debt Has Risen Fast: The company’s debt-to-equity ratio jumped from 9% in FY23 to nearly 25% in FY25. More debt always adds financial pressure if cash flow turns weak.
• Cash Flow Problems: In Q1 FY26, the company had a negative cash flow of ₹281 crore. If operating expenses rise or collections slow, this could delay growth.
• High Valuation Risk: The IPO values Pine Labs at around ₹25,654 crore, translating to a P/E ratio of 1,340x (based on annualized Q1 FY26 profits) - extremely high compared to peer Zaggle (P/E of 48x). Investors are clearly betting on the future, not the past results.
• Dependence on Few Customers: The top 10 clients bring in 31% of total revenue. Losing even one big client could hurt the numbers.

For detailed information, visit Pine Labs’ official IPO page at INDmoney.

Peer Comparison

Pine Labs competes with both Indian and global FinTech companies. In India, its listed peers include Paytm and Zaggle. Each operates a similar mix of digital payments and merchant technology services.

Source: RHP

• Compared to Indian peers, Pine Labs shows stronger operating efficiency. Its Adjusted EBITDA margin stood at 15.7% in FY25, while Paytm posted a loss-margin of -10% and Zaggle managed 9.4%. This shows Pine Labs has turned every rupee of cost into better output.
• Return on Net Work, however, remains a weak spot. Pine Labs had a net RoNW of -4.15% in FY25, still better than Paytm’s -4.69%, but lower than Zaggle’s positive 9.6%.
• On valuation comparisons, its post-IPO Price-to-Earnings ratio of 1,340x looks steep, especially when peers like Zaggle trade around 49x. Investors are clearly pricing Pine Labs for future potential rather than current profits.

Pine Labs’s Financial Performance

Pine Labs has shown steady improvement in growth and margins over the past three years.

Its revenue increased from ₹1,690 crore in FY23 to ₹2,327 crore in FY25, growing about 17% annually. In Q1 FY26, revenue rose 22% year-on-year to ₹653 crore, led by strong growth in its payments division (including brands like Mosambee and Setu).

The company swung to a profit of ₹4.8 crore in Q1 FY26 from a ₹27.9 crore loss a year earlier. This turnaround was supported by higher income, better cost control, and a ₹14 crore deferred tax credit. Its PAT margin improved from -5.3% to 0.8%, while EBITDA grew to ₹81.8 crore.

Losses narrowed from ₹341.9 crore in FY24 to ₹145.5 crore in FY25, showing improving efficiency. Its EBITDA margin rose from 8.9% in FY24 to 15.7% in FY25, and further to 19.6% in Q1 FY26.

However, borrowings jumped to ₹888 crore by mid-FY26, raising its debt-equity ratio to 25%. This debt helped fund devices and expansion, but adds risk if cash flow remains negative.

Pine Labs IPO Valuation

At the upper price band, the post-IPO market cap will be about ₹25,650 crore.

Its worth noting that Pine Labs has sharply cut its valuation from an earlier $5-6 billion to about $2.9 billion (₹25,650 crore) now, as per reports. This reflects a broader market shift where investors in fintech are prioritizing profitability and stable cash flows over betting on fast growth alone. The company also reduced its IPO size to align with cautious investor demand and to promote sustainable, long-term value creation. This reset signals maturity in how fintech startups are valued amid market realities.

Using Q1 FY26 profit numbers (annualized), the P/E ratio comes to around 1,340x, meaning investors are paying ₹1,340 for every ₹1 of profit.

Who Leads Pine Labs?

Amrish Rau, the CEO and Managing Director, leads Pine Labs with a strong background in FinTech. Known for his earlier leadership at Citrus Pay and Naspers’ PayU, he joined Pine Labs to take it global. His total yearly pay is around ₹5.8 crore, and he holds about 2.47% equity.

Kush Mehra, the President and Chief Business Officer, handles partnerships with banks and merchants. Once part of Visa and American Express, he’s known for his relationship-driven leadership style and was named one of India’s top young business leaders by Economic Times in 2022.

Sameer Kamath, the CFO, is a seasoned chartered accountant who has earlier led finance at Motilal Oswal and Avendus. He joined in August 2025 to strengthen governance and financial discipline.

Together, this trio blends tech, banking, and finance expertise - exactly what a FinTech needs at this growth stage.

Who’s Making Money from the IPO?

Existing investors are selling shares worth ₹1,819.91 crore under the offer for sale (OFS).

• Peak XV Partners will sell shares worth about ₹508 crore, earning nearly 39x return.
• Mastercard (₹130.94 crore) and PayPal (₹149.99 crore) are exiting partially with modest returns of 1.7x and 2.8x.
• Lokvir Kapoor, an early investor, will cash out ₹49 crore with a huge 451x return.

In total, there are 30 corporate investors and about 75 individuals taking part in the offer for sale of the shares. This means liquidity for investors, but also means the company’s next growth phase now depends on new shareholders and public trust.

Anchor Investor Allocation

Ahead of the IPO, Pine Labs allocated a total of about 7.94 crore equity shares to anchor investors at the upper price band of ₹221 per share. This raised a substantial ₹1,753.8 crore (45% of the total issue size), as per the BSE circular.

The anchor portion includes two main investor groups:

Domestic Mutual Funds (DIIs) received roughly 47% of the shares, about 3.75 crore shares, investing ₹828 crore. Leading funds here include the SBI Midcap Fund (₹230 crore), Aditya Birla Sun Life Large Cap Fund (₹101 crore), and Mirae Asset Midcap Fund (₹80 crore).

The remaining 53% of anchor shares, around 4.19 crore shares, went to Foreign Institutional Investors (FIIs) and other institutional buyers, who invested ₹925 crore. Top FIIs involved include the Nomura India Investment Fund Mother Fund (₹125 crore) and the Massachusetts Institute of Technology fund (₹65 crore).

In total, more than 70 different schemes and investors took part in the anchor allocation, showing strong and diverse institutional interest.

Industry Outlook

India’s digital payment market is exploding, from ₹116 trillion in FY25 to an expected ₹256-276 trillion by FY29.

People are using fewer cash payments, and small stores are rapidly adopting digital devices.

Three trends driving this growth:

• More people are choosing digital and UPI payments every day.
• High demand for buy-now-pay-later and flexible EMIs.
• Rapid digitization of small and mid-sized merchants.

Challenges include heavy regulation by RBI and tough competition from players like Paytm and banks offering low-fee alternatives.

Analyst View

The Pine Labs IPO gives investors a chance to own a core player shaping India’s digital payment ecosystem. Its strong merchant network, improving margins, and early signs of profitability make it an interesting long-term bet.

For long-term investors, Pine Labs represents a play on India’s steady shift to digital retail and cashless payments. A strong leadership team and focus on technology growth backs its expansion story.

Short-term investors may also see positive interest due to the trimmed IPO size and decent demand signals from institutional backers, though gains may be limited.

Still, its valuation seems steep, especially given the limited profit history and a one-off tax gain driving Q1 profit. Growth potential is clear, but so are the risks.

In short, Pine Labs is a powerful growth story in India’s digital commerce space, but investors should weigh near-term profitability uncertainty against its long-term potential.

For more IPOs, check INDmoney’s IPO tracker here.

Disclaimer

Source: Pine Labs' RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.