The initial public offer (IPO) comprises a ₹2,080 crore fresh issue and an ₹1,819 crore offer for sale at the upper end of the ₹210-221 price band.
Once privately valued at about $5 billion ( ₹41,393 crore) in 2022, Pine Labs has now marked down its worth by nearly 40%, to around $2.9 billion ( ₹25,373 crore). At this level, the company is valued at roughly 11 times its FY25 operating revenue—comparable to listed peer Paytm’s 11.8x multiple but well above Zaggle’s 3.7x, Mint’s analysis showed.
From a lofty 26x FY23 operating revenue multiple, the reset marks a dose of realism. In a market still digesting Lenskart’s pricey debut, Pine Labs is recasting itself as a global, tech-first merchant infrastructure play.
Analysts say the fintech has taken a deliberate haircut on its private valuation to ensure a smoother public debut amid a value-conscious investing climate.
It has built a meaningful global scale across in-store, online, and gift-card payments, but at the expense of profitability, they said. The valuation reset reflects a shift to align with a market that now rewards earnings visibility rather than growth narratives.
While sharply below its private valuation, Pine Labs still commands a fintech premium, reflecting confidence in its diversified payments stack and scalable platform, said Anshul Jethi, research analyst at financial services firm LKP Securities.
Pine Labs is one of India’s largest merchant commerce platforms—the infrastructure powering payments at stores, restaurants, and online checkouts. Sitting at the intersection of merchants, banks, and consumers, it enables card, UPI (Unified Payments Interface), EMI (equated monthly instalment), and gift-card transactions through its cloud-based software.
Profit engine
Pine Labs’ financial success is driven by its digital infrastructure and transaction platform, which accounted for approximately 70% of its ₹2,274 crore revenue in FY25, as per its red-herring prospectus (RHP).
This core segment is volume-led, enabling payments across 1.84 million active checkout points, serving 988,300 merchants as of June 2025. The platform processed transactions worth ₹11.4 trillion in FY25, placing Pine Labs among India’s top five in-store digital payment players, according to the offer document.
The Qwikcilver unit, which operates one of Asia’s largest prepaid and gift-card ecosystems and accounts for 30% of its revenue, provides a critical cushion to group profitability due to its steady fee income and minimal credit risk, according to experts.
The company remains committed to innovation and quality, said Amrish Rau, chief executive officer (CEO) of Pine Labs, touting its microservices-based, API (Application Programming Interface)-first architecture as being ahead of current merchant checkout trends.
The company maintains an edge by offering an integrated platform which allows merchants to combine payments, EMI, and loyalty in one system—a flexibility that rivals like Paytm and Zaggle are still building toward, said Jethi. This focus on innovation has underpinned the Gurugram-based company’s steady scale-up in the last 27 years, he added.
The company’s persistent focus on software-led services, value-added products, and deep merchant integration has boosted scale and operating efficiency, said Raj Gaikar, research analyst at Samco Securities. As a result, its operating profit jumped 125% year-on-year to ₹357 crore in FY25, he added.
With an operating margin of 19.6% in Q1FY26, Pine Labs maintains the highest profitability among listed rivals such as Paytm and Zaggle.
Pine Labs’ high-margin, value-added services within its integrated ecosystem help offset pressure from intensifying competition and shrinking yields in the payments business, added Ratiraj Tibrewal, CEO of Choice Capital Advisors, an advisory and merchant banking firm.
“Transaction yields are under strain, and merchant acquisition costs have risen due to loyalty schemes and device subsidies,” said Vinit Bolinjkar, head of research at Ventura, a brokerage firm.
With zero-fee UPI payments squeezing yields and cheap Android POS (point of sale) devices lowering entry barriers, Pine Labs and Paytm are differentiating through service and software, said Bolinjkar.
Further, Pine Labs’ digital affordability solution—a high-yield add-on service within its payments business—which include EMI and pay-later options offered at checkout, shores up its margins, noted Jethi from LKP Securities.
With the rise in personal and consumer finance loans, this segment’s payment volumes doubled to ₹2.0 trillion in FY25, expanding at almost 42% annually since FY23, he noted. “It earns processing fees from multiple partners without taking any consumer credit risk,” he said.
Moreover, with offerings across working capital loans and loyalty programs, Pine Labs has deepened merchant engagement and retention, noted Gaikar from SAMCO Securities.
Despite pricing pressure from banks, Pine Labs has created a stickier ecosystem by integrating its tools directly with merchants’ enterprise resource systems, enabling real-time syncing of payments, sales, and inventory, he said.
Gaikar further noted that the company is well placed to withstand margin pressure over the next 12-24 months, supported by its growing base of software subscriptions, digital solutions, and value-added services.
Costly foundation
But Pine Labs’ strong moat rests on costly foundations. Its biggest strengths—technology, talent, and scale—are also what keep costs high and continue to weigh on the bottom line, said Tibrewal of Choice Capital.
According to Nipun Lodha, head of investment banking at broking firm PL Capital, while scale and quality remain Pine Labs’ strongest moat, its march towards profitability has slowed. The company remains loss-making due to continued investments in technology and new business segments, he noted.
The company’s rapid scale-up in recent years has been underpinned by aggressive inorganic expansion. Pine Labs’ inorganic push peaked in FY23, when it spent ₹628 crore on the acquisitions of Mosambee and Setu, integrating them into its merchant and API businesses, its RHP showed.
Later, the company bought Credit+ in November 2023 through its Singapore arm Qwikcilver Pte Ltd to expand its issuing platform across Southeast Asia, though the purchase amount wasn’t disclosed. However, not all bets have always paid off.
The most visible red flag remains a near- ₹37 crore impairment in FY25 on its 2021 acquisition of Fave, a Singapore-based consumer app. The write-down, covering goodwill and technology assets, stemmed from the unit’s underperformance and technology obsolescence, according to the offer document.
Pine Labs acquired Fave, a cashback and digital payments firm, for about $45 million to build a direct-to-consumer layer. But CEO Amrish Rau admitted it “did not grow to expectations” as scaling the business demanded sustained cash burn. Analysts see it as a cautionary tale of the risks in aggressive overseas expansion.
Other costly heads
Employee costs remained the largest expense at 42% of revenue, costing the company ₹984 crore in FY25. While the company’s absolute expenditure has increased, its share in total revenue has trended downward from almost 50% in FY24, reflecting gains in economies of scale.
CEO Rau explains that while Pine Labs’ core business is profitable on an operating level, it records large stock-based compensation expenses in its books, which reduce net profit on paper. Pine Labs’ ESOP expense was around ₹85 crore in FY25, according to its RHP.
Depreciation and amortization continue to weigh on profits, though easing to almost 13% of revenues in FY25 from 20% a year ago, reflecting better cost efficiency, said experts.
The company’s borrowings rose 53% year-on-year to ₹855 crore in Q1 FY26, the document showed. Analysts said the increase was driven by working capital needs, digital checkout point purchases, and point of sale upgrades.
With this, interest expense reached a three-year high of ₹79 crore in FY25, absorbing 3.5% of total revenue. Ventura’s Bolinjkar warned that high finance costs will cap profitability until debt falls, though ₹532 crore of IPO proceeds are planned for prepayment in FY26.
Though, many such spends have seen a gradual decline over the last three years, with the company’s document showing no inorganic outlays in the past two years. The focus has shifted from expansion to integration, and earlier investments are now generating recurring software income, LKP Securities’ Jethi said.
“Even so, Pine Labs’ capital-intensive model—anchored in its vast digital checkout point base and sustained R&D spends—will remain a drag below Ebitda,” he added.
Profit path
However, the narrowing losses for two straight years culminated in Pine Labs’ first profit since 1998. The company reported a net profit of ₹4.8 crore in Q1FY26. But a one-time ₹9.6 crore tax credit aided the company, its RHP showed. Excluding the credit, losses persisted.
Gaikar from SAMCO Securities, expects the company to break even in FY27, if costs stabilize and subscription revenues hold up.
Hence, the company’s valuation reset, analysts said, reflects market’s realism—growth visibility is strong, but profitability remains a work in progress.
Bolinjkar from Ventura, however, sees this as an opportunity for an upside—especially as Pine Labs strengthens its base ahead of global expansion. Despite the Fave write-down, the company continues to see international markets as central to its growth strategy.
Its network already spans 20 countries, including Singapore, Malaysia, the UAE, and Indonesia, serving both banks and large retail chains. The share of overseas operations in total revenue has nearly doubled in the last two years rising to 15% in FY25, the RHP showed.
Pine Labs has further earmarked ₹450 crore of the IPO proceeds for overseas expansion and investments in subsidiaries. Bolinjkar said prudent execution of this geographic push could boost long-term profitability as Pine Labs exports its merchant tech to higher-margin markets.
As the company readies for its debut, investors appear to be pricing in both its discipline and its promise. Grey market trends suggest Pine Labs shares are trading about ₹35 above the upper price band, implying a listing price near ₹256 and a potential gain of 16%.
