LIC-owned small-cap NBFC stock edges higher after SBI’s investment. Do you own?

Paisalo Digital share price rallied more than 3% on Tuesday after the company announced the country’s largest PSU bank, State Bank of India (SBI), has invested in the Commercial Papers (CPs) issued by it. Paisalo Digital shares gained as much as 3.24% to ₹36.96 apiece on the BSE.

The small-cap Non-Banking Financial Company (NBFC), Paisalo Digital said that its Operations and Finance Committee of Board of Directors has made an allotment of 600 commercial papers worth over ₹29 crore to SBI on March 11.

Commercial papers are short-term debt instruments issued by companies to raise funds, and banks, including SBI, often invest in them as part of their liquidity management or to earn short-term returns.

In this case, SBI’s investment in Paisalo likely refers to its purchase of Paisalo Digital’s commercial papers, which is a common investment option for banks. This type of investment helps SBI earn returns while also providing Paisalo with necessary short-term funding.

Paisalo Digital CP Issue Details

Paisalo Digital has issued 600 Commercial Papers of face value of ₹5 lakh each to SBI on a private placement basis. The issue price of the CPs is ₹4,86,594.50 each and the total issue value is ₹29,19,56,700.

The total redemption value of the listed CPs is ₹30 crore, and the tenure of the CPs is 91 days from the date of allotment. The CPs will carry a yield of 11.05%. The date of allotment is March 11, 2025, while the date of maturity or redemption is June 10, 2025.

LIC Shareholding on Paisalo Digital

State-run insurance giant Life Insurance Corporation of India (LIC) holds more than 1% stake in Paisalo Digital. As per the shareholding pattern at the end of December 2024 quarter, LIC held 84,73,644 equity shares of Paisalo Digital, representing 1.35% stake in the company.

Paisalo Digital Stock Price Trend

Paisalo Digital share price has fallen over 11% in one month and 27% on a year-to-date (YTD) basis. The small-cap stock has plunged 40% in the past six months and 59% in one year.

However, over the past two years, Paisalo Digital stock price rallied 23%, while it has delivered multibagger returns of 270% in five years.

At 3:05 PM, Paisalo Digital shares were trading 0.67% higher at ₹36.04 apiece on the BSE. 

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