Pine Labs ₹3,900 Cr IPO Opens | CEO Amrish Rau Reveals Global Growth Plans | Business | ET Now

Sure. Thank you very much. First of all, thank you for bringing me on this session of yours. Look, we are a very well diversified fintech company. We operate in the entire fintech ecosystem doing everything from POS machines to doing online payments to doing bill payment services. But we also do what is called as issuing. So issuing of prepaid cards and issuing of accounts is something that we do. We believe that we are actually building one of the world's greatest fintech company coming out of India.

So we operate in two large business lines. One is the digital infrastructure business line and the second one is what happens on the issuing side of the business. On the issuing side of the business about 30% of our revenues comes from there. There what we do is we create accounts, wallets, prepaid cards and we do all the back-end technology associated with it and there we earn money on processing of transactions. So creating of accounts, holding of money, moving of money, processing of all payment transactions. That's where we make small, you know, a few paise and rupees on every typical transaction and that's about 30% of our revenues. The 70% of our revenues comes on the digital infrastructure side. Within the digital infrastructure side, one of the components is what we do on the POS side. On the POS business, you would have typically seen Pine Labs in all the major hotels, restaurants, retailers. That's the business that we are most famously known for. Less than about 50% of that digital infrastructure business actually comes on our POS business. The second component out here where we do a lot of volumes is where we do all these offers, campaigns, installment payment solutions on our terminal. So for example, if you go to any of the digital retailers and you go and make a purchase for a television and you want to get that converted into installment payment transactions, we process those installment payment transactions and that business of ours has been growing steadily over the last four five years. And then the final component on the digital payments infrastructure side, we make money in terms of online payments and also what we do in terms of bill payment processing. In each of the businesses, we have two types of revenue streams. One, what we charge as a SaaS-based fees on a monthly basis to our merchants and banks and financial institutions. Second is we then charge by the transaction. We charge by the transaction. We also charge by the value of the transaction. That's how our revenues are spread out. As you would have seen in the RHP, last year we were able to show almost about 28-29% revenue growth on a year-on-year basis.

In many of these areas, we've actually been the market leaders. So, we've actually seen that over the last three years, the GTV or the volume of value which has been processed on our platforms has compounded at almost 60% over the last 3 years. The number of transactions on our platforms have compounded at 50% and more. And then what we've been able to show is we've been able to show a consistent revenue growth of more than 20%. In the last three years, what you would have seen is our EBITDA profile has gone from single digits to now to almost 20% EBITDA margin in Q1 of this year. So we have been able to show a consistent compounding at a revenue level. But we've also been able to significantly improve our EBITDA to almost 20% in Q1 of this financial year.

You're absolutely right. I should have said adjusted EBITDA where it is adjusted only for ESOP cost.

So one of the things that we have been focusing on is we have been focusing on ESOP costs. While ESOP costs are non-cash line item but we have been very very clear we have to focus on ESOP costs and our ESOP cost is related to the ESOP policy. Just in the last few months what we've done is we've made a significant change on our ESOP policy where we will now be issuing out ESOP no more at the deep discounted level. There will be a marginal discount but it will not be at a deep discounted level and that has actually been explained in the RHP also. What that does is that ensures that between the adjusted EBITDA line to EBITDA the ESOP costs over a period of time that has reduced in the last 3 years period as a percentage term and you will get to see that in the RHP also.

So total ESOPs available to the employees currently today in the company is at about 9%. I don't have the exact number in terms of how the ESOPs will play out over the next few years.

See, we've been able to show a trend over the last two years where I told you the EBITDA margin has gone from low single digit or low teens to about close to about 20% in this quarter. We do believe that trend is a sustainable trend as long as the revenue growth in the company continues to operate at 20% and plus. Our endeavor at all points of time is to ensure that the revenue growth continues to accelerate and then at the same time obviously the EBITDA will keep on improving as we have shown over the last 3 years period.