Pine Labs IPO: PayPal, Mastercard book huge profits from investments
What's the story
Global payment giants PayPal and Mastercard have made huge gains from their investments in Indian digital payments firm Pine Labs. The two companies invested in Pine Labs during its private rounds and are now sitting on massive paper profits. PayPal's investment has nearly multiplied seven times, while Mastercard's value has doubled since its initial investment.
Investment details
PayPal invested $23 million, Mastercard $70 million
PayPal invested $23 million in Pine Labs back in 2019 when the company was valued at nearly $1 billion. Later, Mastercard joined the capitalisation table with a $70 million investment. After this round, Gurugram-based payment major's valuation jumped to $1.7 billion. Now, both companies have sold around 1% of their shareholding in the Pine Labs IPO at a market cap of $3.2 billion.
Share valuation
Pine Labs shares listed at a premium
At the current market capitalisation of $3.2 billion, PayPal's stake is worth ₹1,374 crore or $154 million while Mastercard's holding post-IPO is valued at nearly ₹1,200 crore ($135 million). Pine Labs shares were listed at a premium on the exchanges today, opening at ₹242 against an IPO price of ₹221. The stock hit an intraday high of ₹250 on the NSE as investor sentiment remained positive.
IPO details
Strong interest from investors
The ₹3,900 crore IPO of Pine Labs received strong interest from all categories of investors. The issue was a mix of fresh shares and an offer for sale by existing shareholders. It was oversubscribed 2.46 times during the three-day bidding window with a price band set at ₹210-221 per share. The company plans to use the funds raised to strengthen its merchant payment solutions, expand its buy-now-pay-later vertical, and support general corporate purposes.