Pine Labs IPO Off to Cautious Start
The much-anticipated initial public offering of fintech firm Pine Labs commenced on Friday, November 7, with plans to raise ₹3,900 crore from public investors. However, the IPO witnessed a relatively slow beginning, with only the employee reservation portion seeing full subscription on the opening day.
Subscription Numbers Tell the Story
By the close of the first bidding day, the Pine Labs IPO had achieved only 13% subscription overall. Data revealed that investors placed bids for 1,29,07,550 shares against the total offering of 9,78,93,739 shares.
The breakdown of subscription across different investor categories showed varied interest levels. The qualified institutional buyers segment saw merely 2% booking, while non-institutional investors subscribed to 7% of their allocated quota. Retail investors demonstrated stronger interest with 54% bids, and the employee portion was notably oversubscribed at 2.96 times.
Grey Market Premium Takes a Hit
In a significant development, the grey market premium for Pine Labs shares has experienced a substantial decline. The current GMP stands at just ₹5 per share, indicating that unofficial market trading is occurring at ₹226 compared to the upper price band of ₹221.
This represents a potential listing gain of only 2.26% if current trends persist. The current GMP marks the lowest point in recent times, having dropped dramatically from previous highs of around ₹60.
IPO Structure and Fund Utilization
The Pine Labs IPO features a price band of ₹210 to ₹221 per share, which would value the company at over ₹25,300 crore. The offering comprises a combination of fresh issue worth ₹2,080 crore and an Offer for Sale comprising more than 8.23 crore equity shares.
Several prominent investors are participating in the OFS, including:
- Peak XV Partners
- Actis (London-based)
- PayPal and Mastercard Asia/Pacific
- Temasek through Macritchie Investments
- Invesco and Madison India Capital
- MW XO Digital Finance Fund Holdco
- Lone Cascade LP and Sofina Ventures S.A.
- Company co-founder Lokvir Kapoor
The company has outlined clear plans for utilizing the fresh issue proceeds. Funds will be allocated toward:
- Debt repayment
- Investments in IT assets and cloud infrastructure
- Technology development initiatives
- Procurement of digital checkout points
- International expansion through subsidiaries including Qwikcilver Singapore, Pine Payment Solutions Malaysia, and Pine Labs UAE
Ahead of the public offering, Pine Labs secured ₹1,754 crore from anchor investors. The Noida-based company specializes in digitizing commerce through digital payment solutions and issuing platforms for merchants, consumer brands, enterprises, and financial institutions.
Investors have until Tuesday, November 11 to participate in the bidding process, with the stock expected to make its market debut on November 14.
