Pine Labs IPO Enters Final Stretch with Moderate Response
The initial public offering of Pine Labs, which commenced on Friday, November 7, is approaching its final subscription day with moderate investor interest. The issue has garnered subscriptions exceeding 58%, with retail investors demonstrating the strongest participation according to latest updates.
The IPO features a price band ranging between ₹210 and ₹221 per share, combining fresh equity issuance worth ₹2,080 crore with an offer for sale component of over 8.23 crore shares. At the upper price limit, the OFS portion could raise approximately ₹1,819.9 crore for existing stakeholders.
Utilization of Funds and Market Position
Proceeds from the fresh issue will be strategically deployed to strengthen the company's financial and operational foundation. The capital will address multiple objectives including debt reduction, IT infrastructure enhancement, cloud computing expenses, technological innovation, and expansion of digital checkout solutions.
Current market indicators show the grey market premium trading without significant movement. Analysis of the past ten trading sessions reveals a declining trend in GMP, with experts predicting further decreases. The premium has fluctuated between ₹0.00 and ₹60 during this period.
Competitive Landscape and Valuation Metrics
Following its anticipated stock exchange debut on November 14, Pine Labs will join established fintech players including One 97 Communications Ltd (Paytm), Zaggle Prepaid Ocean Services Ltd, and One Mobikwik Systems Ltd in the public markets.
Pine Labs seeks an enterprise valuation of ₹18,093 crore, positioning itself between competitors: Paytm targets ₹69,965 crore, Zaggle Prepaid Ocean Services aims for ₹4,349 crore, and One Mobikwik Systems targets ₹1,380 crore.
Financial health varies significantly among these companies. Zaggle Prepaid Ocean Services stands as the only profitable entity in this group with a price-to-earnings ratio of 56.8 times, while the other three companies continue to operate at a loss.
Valuation ratios present a mixed picture: Pine Labs shows an EV/EBITDA multiple of 82.8 times compared to Paytm's (46.4) times, Zaggle's 38.1 times, and Mobikwik's (13.6) times. The EV/Sales metric places Pine Labs at 8.0 times, below Paytm's 10.1 times but above Zaggle's 3.3 times and Mobikwik's 1.2 times.
Expert Perspectives on Fintech Valuations
Harshal Dasani, Business Head at INVasset PMS, notes that Pine Labs enters the market during increasing investor caution toward fintech valuations. While the company demonstrated improved efficiency with FY25 revenue of approximately ₹2,274 crore (28% year-over-year growth) and adjusted EBITDA of ₹357 crore, growth momentum has decelerated compared to previous years.
Dasani highlights Pine Labs' continued reliance on merchant payments and installment financing—both highly competitive segments with narrow profit margins. Despite geographic diversification across 20 countries, the nearly $2.9 billion valuation assumes strong future execution, leaving minimal room for operational missteps in new market expansions.
Regarding competitors, Dasani observes that Paytm, despite being India's largest digital payments platform, confronts ongoing credibility and profitability challenges. While Q2 FY26 revenue increased 24% year-over-year, net profit declined substantially due to one-time adjustments. The core payments business maintains low margins, and the lending and financial services distribution segments face regulatory headwinds and increasing credit risks despite achieving over 60% growth.
Zaggle presents more stable financials but limited scalability potential according to Dasani. Q1 FY26 revenue grew 31% year-over-year to ₹331 crore, with EBITDA margins around 10% and profit after tax reaching ₹26 crore. However, the company's concentration in B2B expense management and prepaid cards may constrain long-term growth compared to broader fintech players.
Mohit Gulati, Chief Investment Officer at ITI Growth Opportunities Fund, emphasizes that operational discipline is becoming as crucial as distribution capabilities in India's fintech sector. He describes Zaggle as building a high-margin, cash-generating enterprise business that defies the growth-at-any-cost approach common among competitors.
Gulati characterizes Pine Labs as leveraging its extensive merchant network and institutional partnerships while pursuing aggressive growth and international expansion that delays sustainable profitability visibility. In contrast, Paytm exemplifies the challenges of managing scale and complexity amid regulatory pressures and strategic pivots that test investor patience.
The Pine Labs IPO represents a significant moment for India's fintech sector, testing investor appetite for companies balancing growth ambitions with path to profitability in an increasingly discerning market environment.
