Mastercard exits Pine Labs, sells 4.31% stake for Rs 933 crore

Mastercard affiliate divests Pine Labs stake

Mastercard Asia/Pacific Pte Ltd, an affiliate of global payments company Mastercard, exited Indian fintech Pine Labs by selling its entire 4.31% stake for Rs 933.57 crore through 13 block transactions on the BSE. According to exchange data, the affiliate offloaded 4,97,24,182 shares at an average price of Rs 187.75 per share, completing the U.S.-based payments major's exit from the Noida-based company.

Domestic mutual funds and insurers absorbed shares

A consortium of mutual funds managed by Kotak Mahindra, Edelweiss and Franklin Templeton, along with ICICI Prudential Life Insurance Company, acquired an equivalent number of shares at the same price. The buyers were reported as acquiring the bulk of the holdings from the Mastercard affiliate in coordinated block deals on Tuesday.

Foreign institutional buyers took part in the deals

Several foreign institutional investors were among the buyers, including Goldman Sachs, Morgan Stanley, Citigroup Global Markets Singapore, BNP Paribas Arbitrage, Ghisallo Capital Management, Rams Equities Portfolio Fund, Societe Generale, Susquehanna International Group and NRSGVCC. The broad participation of foreign investors reflected continued secondary-market appetite for Pine Labs shares following the transaction.

Pine Labs shares closed higher on the BSE

Pine Labs shares rose 2.07% to close at Rs 197.55 apiece on the BSE on the day of the transaction, indicating that the market viewed the transfer to long-only institutional buyers as supportive. The price recovery came despite the supply overhang from Mastercard's complete divestment.

Part of a broader wave of Pine Labs secondary sales

The Mastercard sale adds to a series of Pine Labs secondary transactions this year. In June, financial services firm Actis sold a little over 2% of the fintech firm for Rs 371 crore, and earlier that same month Actis Pine Labs Investment Holdings divested nearly 1% of its holding for Rs 152 crore. Actis is part of global growth investor General Atlantic.