Anand Rathi Sees 20% Potential Upside In Paisalo Digital; Is It A Good Buy?

Paisalo Digital Ltd shares have seen a slight uptrend, gaining 2.55% on Tuesday and closing near Rs 61.55 compared to the previous close of 60.27, as there was an increase in trading activity on the Bombay Stock Exchange (BSE). The stock is well on its path from its 52-week low of Rs 40.25 to its 52-week high of Rs 99.62 with this showing as the multiple investments over the past week have driven the stock upwards.

As per the recent report released by Anand Rathi Investment Services, it picked out Paisalo Digital and labelled it Stock of the Month citing a potential upside of 20.6%. According to the report, the price of the stock had migrated downwards which now stands at 78.6% from the highest recorded price after a brief period of gaining and standing stable at a 50-month moving average. However, it noted, that the retracement which was seen in that particular period, rests over a significantly increasing trend line giving hopes for upward pin high price targeting.

Manan Chaturvedi, the investor relations officer at Paisalo Digital, informed the media that the company would raise USD 75 million by issuing secured foreign currency convertible bonds at a 7.5% interest rate and will do so in several rounds. These bonds are in compliance with those of SEBI listing regulations and are expected to be tenured in 5 years in accordance with those standards set by the Reserve Bank of India related to external commercial borrowings.

The issuance began on 28 November 2024 which will also act as the 'Relevant Date' in setting the floor price for the equity shares at a price of Rs 45.33 for guaranteed investors under the FCCB Scheme.

The company has a market capitalisation of more than Rs 5200 crore and has made decent returns. In September, the promoters acquired at least 45,19,710 shares and increased their shareholding to 52.38%, establishing their confidence in the company. The stock has also declined in value by over 46.3 percent over its 52-week low of Rs 40.40 offering strong value potential.

Paisalo Digital, initially registered under SE Investment Limited in 1992, has officially changed its name since 2018. The non-depositing financing company offers a wide range of financial services and several products including SMEs and MSMEs loans such as income-generating loans designed for business and self-employment. It offers Small-scale financial services, Micro Credit and Alternate Energy Financing for individuals and corporations.

Prospective clients of Paisalo Digital know that the issuer has its backup backed up with sound business and strategic initiatives like the FCCB issuance. In fact, a number of investment heads from Anand Rathi seem very confident of the value 'UNLOCKED' created by this stock. Caution though, investors must check their risk appetite and most importantly their research before taking any further investment plans.