SBI Life-backed NBFC: 700 Commercial Papers allotted to IDBI Bank; shares up 5%

NBFC Stock: A leading NBFC in which SBI Life Insurance has a significant stage, has finalised the allotment of Commercial Papers to IDBI Bank . The NBFC said that it has allotted 700 Commercial Papers to the lender.

Post this, the NBFC stock surged nearly 5 per cent during Wednesday's trading session.

The name of the NBFC under discussion here is Paisalo Digital , a constituent of BSE Smallcap index.

Commercial Papers Issue Price, Value

In an exchange filing, the NBFC said that the Operations and Finance Committee of Board of Directors has allotted 70 Commercial Papers to IDBI Bank. The Commercial Paper carry a face value of Rs 5 lakh face value and a yield of 8.50 per cent.

It said that the issue price of Commercial Papers is Rs 4,81,822.50 each and thetotal issue size or issue value stands at Rs 33,72,75,750. It said that the issue price of Commercial Papers is Rs 4,81,822.50 each. The total issue size or issue value stands at Rs 33,72,75,750.

What Are Commercial Papers?

Commercial Papers are basically short-term debt instruments. It is used by companies to raise quick funds. Commercial Papers are unsecured, meaning no collateral is needed.

Companies issue Commercial Papers to meet short-term expenses. Investors buy them and they get fixed returns. They are usually issued at a discount and redeemed at face value within 1 year, often in days.

Paisalo Digital is a non-deposit taking NBFC. Post this, the counter surged more than 6 per cent to make an intraday high of Rs 40.27. It settled near day's high at Rs 39.89, up 5 per cent.

SBI Life Stake

According to trendlyne data, SBI Life Insurance is an investor in the NBFC. SBI Life owns 62,114,267 shares, representing 9 per cent stake. Besides, state-run LIC has 1.1 per cent stake in the company.

As per exchange data, the NBFC stock has corrected 24 per cent in the last on year while yielded a positive return of 15 per cent in two years. In three years, the counter has delivered an impressive return of 99 per cent. Back in March 2024, Paisalo Digital had issued bonus shares in the ratio of 1:1.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)

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