Pine Labs 2.0: Doubling Down On The Full-Stack Fintech Vision

On November 12, 2025, just a day after Pine Labs’ INR 3,900 Cr IPO closed for subscription, the fintech giant announced it had secured all three key payment licenses from the Reserve Bank of India (RBI): Payment Aggregator (PA), Payment Gateway, and Cross-Border Payments.

This “trifecta” makes Pine Labs the first Indian fintech to hold comprehensive regulatory approvals across the entire spectrum of digital payments, positioning it as a full-stack payments provider at a critical juncture.

The timing couldn’t have been better, as the company’s shares listed on November 14, 2025 at a 9.5% premium and ended the first trading day nearly 14% higher than issue price. Whether this was a coincidence or a planned announcement is unclear, but it gives Pine Labs a big edge over the others. 

While Pine Labs, which was founded in 1998, began its journey as a point of sales (PoS) solutions provider, it has morphed into a multipronged fintech player, with verticals in payments, loyalty and rewards, API banking, online payments and more. It’s also aiming for a bigger share of the B2B cross-border payments wave that’s sweeping the fintech industry. 

On the back of this diversification, Pine Labs showed a turnaround in Q1 FY26, turning profitable and posting a net profit of INR 4.8 Cr. Its FY25 losses stood at INR 145 Cr. It saw a 28.5% YOY growth in FY25 in its topline at INR 2,274 Cr as against INR 1,770 Cr in FY24.

At that revenue scale, Pine Labs listed at an EBITDA multiple of 68x. This was one of the sticking points before the IPO, and why some brokerages cautioned investors against any short-term bets. But does Pine Labs have the edge over its rivals in the long run? 

The Evolution From PoS To Fintech 

Founded in 1998 by Lokvir Kapoor, Rajul Garg, and Tarun Upadhyay, Pine Labs began as a modest provider of point-of-sale (PoS) solutions for merchants in India.

Over the years, it has transformed into a global fintech player, serving over 1.5 million merchants across Asia and the Middle East with an integrated platform that encompasses PoS hardware, payment gateways, API banking, digital lending, and loyalty programs. As of FY25, the company claimed to have processed more than 5.7 Bn transactions annually.

Pine Labs has come a long way from just being viewed as a Point of Sale (PoS) machine business to a newer version, Pine Labs 2.0, where the offerings have multiplied to now include bill payments, issuing and acquiring business, digital payments, and payments processing.

The company’s strategic acquisition of Fave, a Southeast Asia-based consumer payments and loyalty platform, signalled a move into the B2C space, but besides this brief flirting with consumer fintech, Pine Labs has remained steadfast on the B2B opportunity. 

Speaking to Inc42, Peak XV Partners’ managing director Shailendra Singh said that when the fund (then under Sequoia Capital) took a bet on Pine Labs, the digital payments revolution was only just starting. At the time, we knew that PoS would continue to remain a big opportunity. 

“The likes of Square or Stripe had only just started out when we invested, so the PoS model was yet to be challenged. And as we can see now, it’s still very relevant and even UPI has not dethroned PoS as was claimed around 2018,” Singh recalled.  

He added that while contactless payments were touted to be the future, the Indian market swerved away from this Silicon Valley trend, and the emphasis was on UPI-based PoS. Pine Labs, of course, has kept pace with the digital payments revolution; UPI is a major driver for its merchant business, but credit card adoption has been no slouch either. 

However, an analysis of the company’s pre-IPO disclosures shows that 70% of the company’s revenues still come from PoS and software services, whereas its Issuing and Acquiring Business contributed 30% to the overall topline in FY25. Under the latter, Pine Labs earns revenue from enterprises like banks for its API banking services, from issuing and managing prepaid cards, loyalty programmes, and gift cards.

The management of the company and Peak XV Partners’ Singh believe that despite the revenue split, Pine Labs is not a PoS business alone. Rau, for instance, said the company is seeing secular growth across both these major streams and seeing Pine Labs as a PoS solution only is missing the bigger picture. 

Pine Labs Vs The Rest

Post its listing, the Amrish Rau-led company finds itself among Paytm and Mobikwik, the other two major listed fintechs. Both have had their fair share of challenges dealing with regulatory ire, public market uncertainty and, most notably, the path to profitability.

While both Paytm and MobiKwik have shown brief flashes of turnarounds, the competitive landscape and dependency on lending for revenue growth have become a major challenge. This is perhaps why Pine Labs never ventured into lending directly; the company instead sees a huge opportunity within its current core of B2B fintech. 

A peer-to-peer analysis of Pine Labs with Paytm, for instance, reveals that despite having a longer operational history, the former operates on a lower scale in terms of the deployment of PoS devices, total number of merchants onboarded, and the payments volume.

While Paytm had deployed nearly 10 Mn low-cost PoS devices (mostly soundboxes) in FY25 across India’s small and medium-sized businesses, Pine Labs’ push seemed to be on the premium side, deploying 9.2 lakh devices in FY25.

One can argue that Pine Labs’ merchant commissions from its clients would be higher than Paytm’s; however, so far, payments has been a volume-driven business with the scale of merchants and devices being a key industry-defining metric.

Paytm reportedly has captured 40% of the PoS market share in India, and this space has also seen the entry of payments giants like PhonePe and Razorpay over the last few years to capture the subscription-model-centric business.

Pine Labs, on the positive side, has also seen its scale bolstered by strategic acquisitions, including Qwikcilver (gift cards), Fave (a Southeast Asia-based consumer payments and loyalty platform), and Setu (API/open banking infrastructure).

This signals the broader intent of the Rau-led team to move beyond the highly competitive PoS device business to a broader B2B and banking-as-a-service company in India and overseas and foster its partnerships with large banks for a bigger revenue pie.

The inorganic growth engine was fuelled by a cumulative capital raise of over $1 Bn in funding from the likes of investors like Peak XV Partners, Temasek, and Fidelity.

However, growth hasn’t been without hurdles. The fintech sector in India has faced intensifying regulatory scrutiny, particularly post the RBI’s 2022 guidelines on payment aggregators, which mandated stricter compliance on data security, merchant onboarding, and settlement timelines.

Pine Labs, like peers such as Paytm and Razorpay, navigated these waters carefully, securing partial approvals earlier—such as the Prepaid Payment Instruments (PPI) license in 2017 and PA-Online in May 2025.

Pine Labs’ CEO Amrish Rau said this was a first in the Industry and coming on the heels of the IPO, it’s a major milestone for the company. 

This may underscore the much-needed shift for Pine Labs from a hardware-focused entity to a software-driven, regulatory-compliant leader in India’s humongous digital payments space. 

A Mixed Bag IPO: Lessons from Lenskart And Groww

Pine Labs’ IPO, while achieving a respectable 2.46x overall subscription—bolstered by a robust 4.5x from qualified institutional buyers (QIBs)—ultimately emerged as a mixed bag, symbolising the maturing yet discerning Indian public market in late 2025.

The muted retail participation (1.22x) and non-institutional investors’ underwhelming 0.3x uptake, coupled with a subdued grey market premium (GMP) of just INR 3-6 (1.4-2.7% over the INR 221 upper band), underscore investor wariness toward fintech valuations amid persistent losses and sector volatility amidst increasing RBI scrutiny.

One reason for this mismatch could be that institutional investors, who drove the QIB subscription continued, buying heavily on listing day, buoyed by the news of Pine Labs acquiring licenses. These have painted a healthier revenue projection despite the fact that the company has reported a singular quarter of modest profits.

Some have suggested that Rau and management sensed this caution, which is why Pine Labs cut its valuation significantly for the IPO. 

But the company will have to deliver now on multiple fronts while not straying too much from the profitability mark. 

Pine Labs’ listing also coincides with the two most recent high-profile listings: Lenskart and Groww.

Lenskart’s INR 7,278 Cr IPO mirrored Pine Labs’ issue, which was built on institutional strength, clocking a blockbuster 28.27x overall subscription. Yet it stumbled on debut, listing at a 3% discount to issue price, despite posting full-year profitability in FY25. Lenskart’s INR 70,000 Cr valuation was heavily scrutinised in the days leading up to the listing. 

In contrast, Groww represented the gold standard of IPOs in 2025. Its INR 6,632 Cr IPO surged to a 17.6x subscription (QIBs at 25x, retail at 8x), listing at a crisp 12-14% premium on November 12, with an 11% intraday pop driven by its profitability and discount brokerage tailwinds.

Pine Labs’ debut falls in the middle of these two mega IPOs. Investors in the Pine Labs IPO might be pleased with the 14% premium on listing, but to truly justify the valuation and create more shareholder value, Pine Labs will have to double down on diversification. 

Where Is Pine Labs’ Moat?

While Pine Labs’ growth outlook remains compelling, anchored in India’s $10 Tn digital payments ecosystem by 2030, the company will have to first clear its debt of nearly INR 900 Cr as of FY25 (a part of the IPO proceeds, INR 530 Cr, will go towards resolution of a part of the debt), while also scaling its overseas bets.

Even though the fintech firm may appear smaller in comparison with its listed rival, Paytm, with respect to the core PoS device business, a cross-border license in Pine Labs’ kitty has given it a margin and revenue lever to facilitate payments for its existing enterprise clients or onboard export-focused businesses from India.

Pine Labs’ first-mover advantage in collaborating with financial institutions in Southeast Asia will further strengthen its moat against the fintechs which do not have such a sizable presence outside India.

On the domestic front, India’s digital payments industry grew at a healthy CAGR of 35% from FY20-25 in terms of the total payments volume metric; this growth is expected to taper at a CAGR of 21-24% from FY25-29 according to SSL Research data.

Similarly, India’s digital peer-to-merchant transactions that grew at a CAGR of 36.7% from FY20-25 are also likely to slow down with a projected CAGR of 25.6%-28.2% in FY25 to FY29, as per Pine Labs’ disclosures.

This slowdown in digital payments necessitates payments-focused firms to diversify their revenue streams and strengthen their lending and other businesses.

“When you consider the breadth of offerings Pine Labs has — offline business, value-added services and transaction processing, banking and fintech APIs, bill payments, online payments and issuing and processing — you are talking about a full-stack fintech player,” Singh told Inc42

The acquisitions of Setu in 2023, Qwikcilver in 2019, and Qfix in 2022 have also enabled the company to venture beyond the payments space. The Peak XV partner reiterated that Pine Labs is arguably the only company that has relationships or partnerships with the five top banks, retailers, and ecommerce players in India. But this extends beyond just point of sale.   

Pine Labs has calculated the revenue risks and has received the regulatory approvals in time to expand beyond its core business. An 80% merchant retention rate on the platform signals substantial resilience, but competition is growing and has a similar diverse revenue structure as Pine Labs. 

The likes of Paytm, BharatPe, PhonePe and Razorpay have all looked to jump on the hybrid PoS train and are looking to cater to various niches. This is perhaps why Pine Labs’ relationships with some of the biggest ecosystem partners in India is a key factor.  

Brokerages have echoed this balanced narrative, going long on the company, thanks largely to existing contracts with these large banks and retailers. 

“The company’s operations have witnessed a turnaround with robust growth in EBITDA and Adjusted EBITDA during the FY23-FY25 period. On the back of a robust business model, going forward, we believe the company is well-placed to deliver profitable growth and hence, we recommend investors to subscribe to the issue with a long-term investment horizon,” SBI Securities had said in a pre-IPO note.

While the regulatory overhang will always exist in fintech, Pine Labs’ sharp focus on B2B and very light touch on B2C has given it an edge over the rest. 

However, for Amrish Rau and his team, a vision of Pine Labs 2.0 will not only require clearing regulatory hurdles but also sustaining the quarterly profit streak. The biggest challenge for Pine Labs will be keeping this momentum going in the long run.