India's Pine Labs falls on Entrackr report of regulatory threat to gift card breakage revenue
BUZZ-India's Pine Labs falls on Entrackr report of regulatory threat to gift card breakage revenue ** Shares of Pine Labs PINL.NS fall as much as 4.6%, last down 1.5% at 151.3 rupees
** Co's high-margin gift card "breakage" revenue faces regulatory threat, a report by media outlet Entrackr says
** Qwikcilver, a major unit of the fintech firm, derives ~90% of its revenue through its gift card business; breakage income from unredeemed balances flows "almost directly to bottom line" - Entrackr report
** On April 22, India's RBI proposed that outstanding balances on expired/inactive prepaid instruments be transferred back to source/verified accounts
** Proposal directly impacts margins of co and could have a disproportionate effect on profitability, Entrackr says
** Co says the report is misleading and incorrect, and that breakage is not material to revenue or profit, in a filing with the exchanges
** Adds that it does not foresee impact from RBI's guidance on breakage income
** YTD, stock down ~37%
(Reporting by Mridula Kumar in Bengaluru)
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