Why CEO Amrish Rau Is Taking Pine Labs Public at a Lower Valuation — Explained

Fintech start-up Pine Labs is all set to launch its IPO (initial public offering) this week at a valuation about 40% lower than its last private fundraise. The Gurugram-based platform is targeting a valuation of over ₹25,300 crore (around $2.9 billion). This represents a huge decline from its last private valuation of over $5 billion in 2022.

The merchant e-commerce platform backed by PayPal and Mastercard has fixed a price band of ₹210-221 per share for its upcoming market debut. The company’s ₹3,900-crore IPO will open for public subscription on November 7 and conclude on November 11. Further, shares would be allocated to anchor investors on November 6.

It is pertinent to note that Pine Labs has reduced its primary offering by 20% to approximately $234 million from $26 billion in its draft prospectus filed in June. However, the offer for sale has been decreased by 44% to 82.3 million shares from 148 million shares planned earlier.

Existing investors, including Peak XV Partners, PayPal, Mastercar, Temasek Holdings will be selling part of their holdings in the offering. While addressing a press briefing on Monday, Pine Labs CEO Amrish Rau said that investors preferred to retain a larger portion of their shareholdings, which resulted in a smaller offer for sale.

“When it came to the pricing of this IPO, we were very clear that we want to continue to garner goodwill, and we wanted to get everybody’s support when we go out with this pricing for this IPO. We believe we were able to maintain that because, at the end of the day, it takes a village to come together to create a successful IPO,” the CEO said.

“You would see that we have reduced the primary from ₹2,600 crore, and that has largely come out of one component, which is reduction in the debt repayment amount. Over the last two quarters, there has been a trend. As far as our financials are concerned, our EBITDA performance continues to increase,” he highlighted.

“So, we just did not see the pressure for us to try and reduce debt for diluting equity, and hence we decided to reduce the primary component also,” Rau added.

Pine Labs CEO on Profitability

Rau noted that the company chose a valuation that invites broad investor participation instead of chasing a loftier number in isolation. The goal, he said, was to build a supportive shareholder base from the beginning, rather than going it alone for the sake of optics.

Addressing concerns about whether the price range leaves value on the table, the CEO said that leadership is confident in the chosen band. Ultimately, he added, the public markets will decide the company’s true valuation based on its performance and delivery post-listing, with real worth emerging only once results begin speaking for themselves.

“Eventually, once we go into public markets, how we perform, how we create our results and what we show to the market, only on that basis will the true value be discovered once we get listed,” he said.

The company’s RHP revealed that its adjusted EBITDA more than doubled to ₹356.7 crore in FY25 from ₹158.2 crore in the previous fiscal, with margins nearing the 20% mark, a sharp improvement from the low single-digit levels seen just a few years back.

He also pointed out that the firm’s reported PAT remains tempered by ESOP-related costs and accounting adjustments tied to its shift toward public-market disclosures. He added that Pine Labs has revamped its ESOP framework to grant options closer to fair market value instead of deep-discount issuances, aligning its practices with public-market standards.

Founded in 1998, 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.

Its technology infrastructure supports digital transactions and payment processing in India as well as in a few international markets such as Malaysia, the UAE, Singapore, Australia, the US, and parts of Africa.

Currently, it serves over 980,000 merchants, 716 consumer brands, and 177 financial institutions, with more than 6 billion transactions cumulatively valued at over ₹11.4 trillion. It is already being operated in 20 countries, including the US, the UAE, Australia, Singapore, and more.

In India, Pine Labs has direct competition with players such as Razorpay, Paytm, and Walmart-backed PhonePe. The company swung to profit in the June quarter, reporting net earnings of ₹47.86 million (approximately $540,000) versus a loss of ₹278.89 million in the same period last year.

Its operating revenue climbed 17.9% year-on-year to ₹6.16 billion (about $69 million). Its international operations accounted for roughly 15% of overall revenue, generating ₹943.25 million (around $11 million), up from ₹795.97 million in the year-earlier quarter.