Pine Labs IPO Off to a Steady Start, Employee Enthusiasm Steals the Show
The public subscription for the initial public offering (IPO) of fintech major Pine Labs commenced on November 7, registering an overall subscription of 13% on the first day. While the broader investor categories showed varied interest, the employee quota emerged as the clear frontrunner, being fully subscribed and then some.
Breaking Down the Day 1 Subscription Figures
The initial response reveals a nuanced picture. The portion reserved for Non-Institutional Investors (NIIs) was subscribed 7%, while Qualified Institutional Buyers (QIBs), typically the heavyweights, showed a notably low engagement of just 2%. The standout performance, however, came from the company's employees. The equity shares set aside for them were subscribed a remarkable 2.96 times, indicating strong internal confidence in the company's prospects.
The IPO, which will close on November 11, has a price band set at ₹210 to ₹221 per share. At the upper end, the company is aiming for a valuation north of ₹25,300 crore.
Anchor Investment and IPO Structure
Just a day before the public issue opened, Pine Labs bolstered its offering by securing ₹1,754 crore from anchor investors. The structure of the public offering allocates 75% of the shares to QIBs, 15% to NIIs, and 10% to retail investors. A separate portion of shares worth up to ₹25 million was reserved for employees, who are also eligible for a discount of ₹21 per equity share.
The IPO comprises a fresh issue of shares worth ₹2,080 crore and an Offer for Sale (OFS) of over 8.23 crore shares by existing shareholders, valued at approximately ₹1,819.9 crore at the top price. Proceeds from the fresh issue are earmarked for debt repayment, IT asset investment, cloud infrastructure, technology development, and acquiring digital checkout points.
Grey Market Sentiment and Broker Views
The current Grey Market Premium (GMP) for the Pine Labs IPO is ₹4. This suggests an estimated listing price of around ₹225 per share, a modest 1.81% gain over the upper price band. Market observers note that the GMP has been on a downward trend.
Leading brokerages have expressed a positive outlook. IDBI Capital has recommended a 'SUBSCRIBE' rating for the long term, highlighting the company's extensive network of nearly 988,000 merchants, 716 consumer brands, and 177 financial institutions as of June 30, 2025. They noted that the stock is trading at an EV/Sales and EV/EBITDA of 8.0x and 82.8x respectively at the upper price band.
Echoing this sentiment, SBICAP Securities also recommended subscribing with a long-term horizon. They pointed to Pine Labs' strong relationships with clients like HDFC Bank, Croma, and LG Electronics, and its positioning to capitalize on a massive market opportunity estimated at approximately ₹276 trillion by FY29. The brokerage also underscored the company's impressive financial turnaround, with Revenue and EBITDA growing at a CAGR of 19.3% and 538.6%, respectively, from FY23 to FY25.
The company plans to use ₹532 crore from the IPO proceeds to pay off its debt.
Timeline and Key Participants
The basis of allotment for the Pine Labs IPO is tentatively scheduled for finalization on Wednesday, November 12. Refunds will be initiated on Thursday, November 13, and the shares will be credited to the demat accounts of successful allottees on the same day. The much-anticipated listing of Pine Labs shares on the BSE and NSE is expected to take place on Friday, November 14.
The book running lead managers for the issue include Axis Capital, Morgan Stanley India, Citigroup Global Markets India, JP Morgan India, and Jefferies India. KFin Technologies is the registrar for the IPO.
