This NBFC Stock Approves Fundraise of Rs 50 Cr Via NCDs To Bolster Lending Operations; LIC Owns Stake

Paisalo Digital Ltd NBFC (non-banking finance company) with a shareholding by LIC is planning to issue Non-Convertible Debentures (NCDs) through private placement to the tune of Rs 50 crore. This was decided at the meeting of the Operations and Finance Committee held on 15th May 2025, which has already been discussed in the company filing.

The company proposes to issue 5000 secured rated and listed redeemable NCDs with a face value of 1 lakh each to be traded on the Electronic Book Provider (EBP) platform, totalling Rs 25 crore, with an increase of Rs 25 crore if the demand exceeds the base size. This proposal, though, has a total garnering potential of Rs 50 crore.

The redeemable debentures listed to be offered retain an interest of 10% per annum, monthly, with two-year maturity period offering.

According to the filing, the draft date of allotment is May 22, 2025, pending regulatory approvals. The NCDs will be collateralized by a first-ranking pari-passu charge on hypothecated receivables and will have a minimum coverage of 1.10 times the outstanding principal amount. In the event of a delay to the debt servicing, Paisalo has guaranteed investors an additional 2% interest per annum as compensation.

Paisalo highlighted that no special rights or privileges are attached to the said instruments and that the terms remain unchanged. The issue is subject to compliance with SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015.

Institutional shareholders include investors like Life Insurance Corporation of India, as well as SBILife Insurance, which also serves as the main stakeholder to Paisola. LIC possesses a 1.17% stake equivalent to 77.6 lakh shares, which has a slight expected dilution to 1.03% after the conversion of the convertible securities. SBI Life Insurance holds a 9.36% stake of 6.21 crore shares, which may be diluted to 8.26% post conversion.

Despite Paisalo Digital's strong fundamentals and extensive reach, its stock has faced heavy selling pressure for the past year. It registered a 47% decline over the last 12 months, which includes five consecutive months of negative returns. However, the stock seems to be recovering, up 6% this month as of mid-May. Still, it trades more than 57% below the 52-week high of Rs 81.95 it reached in July 2024 and is up 17% from the recent low of Rs 29.75 in April 2025.

Paisalo Digital Limited is a listed NBFC under the Reserve Bank of India, with a robust distribution network consisting of 3,275 touch points across 22 states, focusing primarily on rural and semi-urban geographies in India. Dominating the market of income-generation loans, over 65 lakh customers have availed them, enabling greater financial inclusion and bolstering socioeconomic development. Such activities have made Paisalo a major facilitator of economic transactions, having completed over Rs 3,400 crore worth of transactions in just two years.

The company's business correspondent model, paired with tech-savvy approaches from their partnered banks, SBI and Bank of India, empowers India's underserved communities by providing utilities at the grassroots level.