Pine Labs IPO: Peak XV Mints 39.5X Return, Lightspeed Books Loss

Peak XV Partners raked in one of its biggest public market windfalls this year through its partial exit from Pine Labs. The venture capital (VC) firm offloaded a little over 2.3 Cr shares via its investment vehicle, Peak XV Partners Pine Investment Holdings, amounting to INR 508 Cr as part of the OFS component of the fintech major’s IPO. 

The sale will fetch the VC firm a 39.5X return on its initial bet on the company. Besides, the investor is also selling a small portion of its stake through another vehicle, Peak XV Partners Investments IV, which will generate around INR 6 Cr, translating to a 1.4X return. 

The firm has been among the most active sellers in Indian tech IPOs this year, recording strong returns from partial exits in companies like Groww, where the firm raked in INR 1,582 Cr at 52X returns.

Meanwhile, Pine Labs‘ other early investors like Actis, Temasek, Madison India, Sofina Ventures, and Altimeter, are also trimming their stakes in the offer for sale (OFS) component of the IPO. 

Actis (3.1X) and Temasek (2.9X) are expected to pocket around INR 195 Cr and INR 193 Cr, respectively, while Madison India will see a nearly 5.6X return on its investment.

However, not all investors are walking away with gains. Lightspeed and BlackRock, which backed Pine Labs at higher valuations, will be offloading their stake at losses. Lightspeed’s two investment entities are realising less than their acquisition cost, while BlackRock’s multiple offshore funds are barely breaking even on their holdings. 

At an average cost of acquisition of INR 375, Lightspeed is making a loss of about 41%. While BlackRock is exiting at a mere 1.2X returns.    

In total, about 30 investment funds and institutional shareholders are participating in Pine Labs’ offer for sale, collectively looking to monetise a part of their long-held stakes.

Ahead of the public issue opening on November 14, Pine Labs raised INR 1,753.8 Cr from 71 anchor investors, including SBI, Nomura India, HSBC, ICICI Prudential, Franklin Templeton, MIT, Morgan Stanley, and Tata Digital India Fund. The company allotted 7.93 Cr equity shares at INR 221 apiece, the upper end of its price band.

Nearly half of this anchor allocation, 3.75 Cr shares or 47.26%, went to 12 domestic mutual funds across 30 schemes.

The IPO, which closed on November 11, comprises a fresh issue of up to INR 2,080 Cr and an OFS of up to 8.23 Cr shares. At the upper end of the price band (INR 221), the total issue size stands at about INR 3,900 Cr, valuing the company at INR 25,377 Cr. Shares are slated to list on the exchanges on November 14.

The company plans to use the fresh capital to repay or prepay borrowings, invest in overseas subsidiaries, and strengthen its technology infrastructure.

Pine Labs FY25 Snapshot

Source: Inc42 Datalabs

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Founded in 1998, Pine Labs provides digital payment and issuing solutions to merchants, consumer brands, enterprises, and financial institutions in India and markets such as Malaysia, the UAE, Singapore, Australia, the US and Africa. It currently serves over 9.2 Lakh merchants, 666 consumer brands and enterprises, and 164 financial institutions.

On the financial front, Pine Labs reported a net profit of INR 4.8 Cr in Q1 FY26, aided by a one-time tax credit of INR 9.6 Cr, its first quarterly profit. Excluding this, it would have remained in the red with a pre-tax loss of INR 4.8 Cr. While in Q1 FY26, the revenue from operations rose 18% YoY to INR 615.9 Cr.

Meanwhile in FY25, the company narrowed its net loss by 57.4% to INR 145.5 Cr from INR 341.9 Cr in FY24, as revenue climbed 28.5% to INR 2,274.3 Cr.