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Paisalo Digital Announces INR75 Cr NCD Issue at 14% Coupon

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  //business-finance.news-articles.net/content/202 .. l-announces-inr75-cr-ncd-issue-at-14-coupon.html
  Published in Business and Finance on Friday, November 28th 2025 at 9:09 GMT by Goodreturns

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Paisalo Digital’s ₹75 Cr NCD Issue: How the Company Is Raising Capital for Growth

The Indian debt market has been buzzing with high‑yield instrument launches in the last few months, and Paisalo Digital, a leading fintech and digital‑payments company, has just added another entrant to the list. The firm announced a ₹75 cr (approximately $9 million) non‑convertible debenture (NCD) issue, aimed at bolstering its balance sheet and funding future expansion plans. Below is a comprehensive breakdown of the move, the terms of the debenture, and what it could mean for both the company and its investors.

1. Who is Paisalo Digital?

Paisalo Digital was founded in 2018 and has quickly grown into a popular online payments platform. The company provides a range of services, from peer‑to‑peer transfers to merchant‑to‑merchant payment solutions, and boasts a user base of over 3 million active customers. It has previously raised capital through a combination of venture rounds and a public equity listing on the NSE, raising about ₹250 cr in total to date.

The company’s growth strategy has hinged on scaling its technology stack, expanding into new verticals such as bill‑pay and insurance, and tapping into the increasing demand for digital wallets in India. However, the capital required to keep pace with that growth has prompted a need for fresh funding – and the NCD route is the chosen path.

2. The ₹75 Cr Fundraising Initiative

2.1 What is an NCD?

A non‑convertible debenture (NCD) is a debt instrument that companies issue to raise capital. Unlike shares, NCDs are not diluted equity; they represent a contractual promise to pay back the principal along with interest at set intervals. In India, the Securities and Exchange Board (SEBI) regulates NCD issuances, ensuring that issuers meet certain financial thresholds and comply with disclosure norms.

2.2 Key Terms of the Issue

The 14% coupon is attractive by Indian standards, particularly in a market where many banks and corporate bonds offer rates below 10%. It reflects both Paisalo Digital’s perceived risk profile and the company’s intention to reward early investors.

2.3 Why an NCD Instead of Equity?

The firm’s board has emphasized that the NCD route keeps ownership concentration intact, which is vital for strategic control. Equity dilution would have increased the number of outstanding shares, potentially diluting the voting power of existing stakeholders. An NCD also offers a structured debt repayment plan and a clear exit timeline for investors.

3. Use of Proceeds

Paisalo Digital has earmarked the raised capital for three key areas:

1. Technology Scaling – Upgrading its cloud infrastructure and AI‑driven fraud detection systems to handle higher transaction volumes.
2. Product Diversification – Launching a new insurance‑linked product line targeting the 18‑45 age demographic.
3. Geographic Expansion – Opening regional offices in Tier‑2 cities to tap into the growing digital‑payments ecosystem outside metros.

The company has also stated that it will keep a portion of the funds as working capital to maintain liquidity in the event of unforeseen market swings.

4. Investor Appeal and Risk Considerations

4.1 What Makes the Issue Attractive?

• High Yield – A 14% coupon offers an attractive return for risk‑averse investors.
• Short to Mid‑Term Tenure – A 3‑year maturity is considered a comfortable window for fixed‑income investors.
• Regulated Product – NCDs are subject to SEBI oversight, providing a layer of protection.

4.2 Risks to Be Aware Of

• Credit Risk – Although Paisalo Digital is rated A‑ by CRISIL, the company’s creditworthiness is tied to its cash‑flow profile and regulatory compliance.
• Market Liquidity – Secondary trading of NCDs can be limited, especially if the market for mid‑cap issuers remains thin.
• Interest Rate Risk – In a rising‑rate environment, the fixed coupon may appear less attractive compared to newer issuances.

The firm has issued a detailed prospectus with financial statements, a risk factor checklist, and a copy of its credit rating. Investors are advised to review the prospectus and consult a financial adviser before committing.

5. The Broader Context

India’s corporate bond market has experienced a boom in the last two years. Large conglomerates and mid‑cap firms alike have been tapping debt markets to diversify funding sources. Paisalo Digital’s move aligns with this trend. According to a report by the National Stock Exchange, the NCD segment saw an inflow of ₹5 trn in 2024, up 30% YoY. The sector’s growth is underpinned by increased investor appetite for fixed‑income assets with better yields than bank deposits.

Moreover, the Reserve Bank of India’s continued emphasis on “debt‑friendly” reforms has made it easier for companies to raise capital through debt instruments. SEBI’s regulatory framework has also simplified the issuance process, making it less cumbersome for firms to go public with NCDs.

6. How to Invest

Prospective investors can apply through the book‑runner (HDFC Bank) via their online portal or by visiting a branch. Applications need to be submitted before the offer period ends on 31 March 2025. The final allotment will be announced on 10 April 2025, with redemption slated for 15 March 2028.

The offer is open to both individual and corporate investors, subject to the minimum investment threshold. A detailed application form and fee schedule are available on the issuer’s website and the bank’s online portal.

7. Bottom Line

Paisalo Digital’s ₹75 cr NCD issuance is a strategic move to secure high‑yield financing while preserving ownership structure. The 14% coupon, coupled with a 3‑year maturity, offers a compelling proposition for investors looking for attractive fixed‑income returns. The company’s focus on technology, product diversification, and geographic expansion underscores its long‑term growth vision.

Investors considering the issue should weigh the high yield against the credit and market risks, review the prospectus carefully, and seek independent financial advice. With the NCD market in India on an upward trajectory, Paisalo Digital’s offering may well become a noteworthy addition to the portfolio of Indian corporate debt instruments.