People mistake us for a PoS-only company, they're missing the full picture, says Pine Labs CEO Amrish Rau

Amrish Rau, CEO, Pine Labs

Every initial public offering (IPO) sees the company's chief executive paying a mandatory visit to the retail investors in Ahmedabad and Rajkot, who have considerable sway over how the offer is perceived.

In the middle of his Gujarat tour to meet investors, Pine Labs CEO Amrish Rau spoke to Moneycontrol on why the company needs to change the image of a point of sale (PoS) machine company to a new generation software-led payment services enterprise, how it is different from its peers and what will the IPO, which opens November 7, change for the firm and him? Edited excerpts of the interview:

Pretty much every company going to IPO does go to Rajkot and Ahmedabad. Just as a standard. Obviously, we have been talking to all investors, and they have all been very positive.

Literally every one of my press interactions had questions about the IPO size. You know, investors are ready to stay. I mean, they wanted to stay in, and nobody is looking for an exit as of now.

In the RHP, we have already called out that over the last three years, the gross transaction value (GTV) — or the volume-based growth — in Pine Labs has been growing at almost 60 percent on a compounding basis.

Our value of transactions has been growing at about 48–50 percent on a compounding basis. And the number of merchants we have brought on board has grown by 30 percent year-on-year. So, just to give you a perspective, the business has been growing extremely well and that is being reflected in our numbers and metrics, which we have in the RHP.

Pricing is a standard process. Having said that, our philosophy on pricing was very clear. There’s complete goodwill with the clients we have — banks, retailers, e-commerce, and quick-commerce companies.

There’s no payments company in India that can say all five top banks, all five top retailers, and all three leading e-commerce and quick-commerce companies are their customers. They all work with Pine Labs because we deliver the best technology solutions in the market.

So yes, while we had valuation benchmarks, this overriding goodwill philosophy actually guided our pricing decision.

If you look at our numbers, transaction volumes have grown 60 percent, the number of transactions 50 percent and merchants have grown by 30 percent. That has given us secular growth at the revenue level and helped us capture that growth into adjusted EBITDA. That has been our secret sauce.

We have had broad-based growth across revenues and transactions. We have been able to demonstrate that our costs have not grown while the company has grown 20–25 percent on a CAGR basis at the revenue level. So, we have captured that benefit at the EBITDA line. Our EBITDA margins have gone from 11–12 percent in FY22 to 20 percent now, while revenues have scaled significantly.

You would have noticed our ESOP costs are trending down. Before the IPO, we issued new ESOPs closer to the FMV (fair market value) of Pine Labs stock, not at deep discounts because of that, the accounting impact will be lower. Having said that, there has been some ESOP cost impact in the quarter that has gone by (Q1) but even after factoring that we turned PAT positive. There is a clear trend about how we want to look at ESOP costs.

Pine Labs shift to software and UPI rather than just card payments seems to have worked.

Yes, and here is a number worth noting. In Q1 FY26 alone, we reported $46 billion in GTV volumes. Compare that to the annualised numbers of other firms. So, it’s not just offline (business) driving our growth, it is secular GTV growth across all products — PoS, online, BBPS, prepaid. (BBPS is the centralised online utility bills and recurring payments solution developed by NPCI).

One of the mistakes that people, especially ones who look at our business from an old mindset, make is thinking Pine Labs is all about PoS. We are seeing secular growth across all lines of business.

Revenue growth and EBITDA margin.

It is literally in front of you right now. Let me give you an example: our prepaid business (issuing services) now contributes about 30 percent of total revenues. In Q1, we did around Rs 650 crore in revenue, and 30 percent of that came from prepaid business. That’s a big shift.

So yes, one of the big mistakes people are making is thinking we are a PoS company. They are missing the full picture. We have strong positions in BBPS, online payments, issuing, and processing. Pine Labs 2.0 is already here.

As per our RHP, we operate across four large verticals: Offline business; Value-added services and transaction processing; Fintech infrastructure (APIs, BBPS, online payments; and Issuing and processing.

The combination of these four makes us a full-stack fintech. Honestly, no other player in India offers such a breadth of products and services anywhere nearby.

In my case, I had already built a successful startup (Citrus Payments), and had a very successful exit. This time around, we are on a mission to create a world-class fintech with broad product capabilities.

For me, in my head … this IPO is purely a corporate event. I honestly see that scaling and growing this business is a larger goal, and I don’t want to think of this as any major outcome … and really treat it (IPO) as another step as we go forward.

Honestly, it comes from the earlier experience …I have already done a successful startup and now is the time to create a very large broad-based fintech.

That I will experience over the next 12 months. But for now, I’m more fixated on the technology and products that will help us build a world-class fintech.

Ask me that question after the IPO. (Laughs)