Pine Labs may be preparing for an IPO

Written by Kapronasia || June 26 2024

Pine Labs is one of India’s most prominent fintechs and with its focus on B2B payments – and avoidance of the retail segment – eschews many of the problems that have dogged Paytm. Pine Labs serves over 500,000 merchants – including Sony, BMW and Samsung – to which it provides solutions for payments and other financial services. In 2022, it reportedly filed confidentially for an IPO with the U.S. Securities and Exchange Commission, but that plan never came to fruition given weak market sentiment. Now Pine Labs has resumed its IPO plans, but this time it is planning to list at home in India.

According to a June 21 Bloomberg report, Pine Labs may try to raise about US$1 billion at a valuation of more than US$6 billion. The company could issue both new and secondary shares, as well as do a pre-IPO fundraising round ahead of any listing.

We reckon Pine Labs is restarting its IPO process for several reasons. First, there is growing investor appetite for Indian stocks. In Nov. 2023, the market value of companies listed on India’s exchanges surpassed US$4 trillion, according to Refinitiv. That means it ranks No. 4 in value globally behind the U.S., China and Japan. Long-term investors have an increasing interest in Indian equities, which is a shift from the past when Indian stocks attracted more short-term investors.

Bloomberg data show that about US$7 billion has been raised via IPOs in India this year, more than thrice the volume from the same period in 2023. That’s turned the subcontinent into one of the hottest markets for share sales globally.

Second, Pine Labs has managed to grow in private markets during a time of greater investor scrutiny than many of the unicorns that went public when interest rates were low and VC funding flowed freely. Both Invesco and Baron Funds have recently raised Pine Labs’ valuation, the former to US$4.8 billion in Dec. 2023 and the latter to US$5.8 billion in April.

One possible sign that Pine Labs is set on going public at home is its decision to move its domicile from Singapore to India. An investor in Indian startups told Tech Crunch that Indian startups are shifting their domiciles to India because it is highly unlikely for startups with valuations below US$20 billion to get meaningful coverage from analysts in developed markets, which could dampen institutional investor demand.