India’s Pine Labs jumps 29%, overcoming valuation jitters in red-hot IPO market

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BENGALURU -India’s Pine Labs soared in its trading debut on Friday, valuing the company at 320.27 billion rupees ($3.64 billion), as strong growth prospects for the payment solutions company trumped valuation worries in a sizzling IPO market.

After listing at 242 rupees, the stock rose as much as 28.5% higher than its issue price of 221 rupees to 284 rupees on the National Stock Exchange (NSE).

Pine Labs’ debut comes in the middle of a booming IPO market in India. Over 300 companies have raised $16.55 billion through early November, with IPO fundraise for this year expected to surpass 2024’s record of $20.5 billion.

While the busy primary market has seen blockbuster listings from the likes of LG Electronics India and broker Billionbrains Garage Ventures, stretched valuations have limited any listing pop for other counters including Lenskart and Canara HSBC Life Insurance.

“Customer acquisition and growing number of digital transactions indicate that underlying prospects (for Pine Labs) are strong,” said Deven Choksey managing director at DRChoksey FinServ, “The challenge is making money on a sustainable basis and then valuations.”

Pine Labs issued shares at a valuation of $2.9 billion in its $440 million IPO, compared with a $5 billion valuation at the time of its last private fundraise in 2022.

The debut values Pine Labs below rival Paytm, which has a market capitalisation of about $9.5 billion.

Backed by Peak XV Partners, Temasek, PayPal and Mastercard, Pine Labs provides payment solutions such as point-of-sale terminals, and competes with Paytm and Walmart-owned PhonePe.

“There is a valuation frenzy across most consumer-driven technology companies as investors want to have them in their portfolios and they pay premium for that,” Choksey added.

($1 = 87.8950 Indian rupees)

(Reporting by Komal Salecha and Vivek Kumar M in Bengaluru; Editing by Ronojoy Mazumdar)