Paisalo Digital Limited moves to reshape its capital structure

The 12% coupon cannot be quantitatively compared with Paisalo Digital’s latest WACF from the evidence available here because the most recent quarterly WACF is not reported. The issuance is described in news coverage as an unsecured NCD at a 12% coupon, although the cited coverage refers to Rs 180 Crores or Rs 94 Crores—not the Rs 124.47 Crores stated in the question.^[1]

Using your stated issue size, the annual coupon outflow would be approximately Rs 14.94 Crores, calculated as Rs 124.47 Crores × 12%. The relevant funding-cost spread is:

12.00% − reported WACF

• If WACF is below 12%, this NCD is more expensive than the existing average funding pool and should raise marginal funding cost.
• If WACF is already above 12%, the issuance could reduce marginal funding cost.
• The comparison must be made on the same basis—consolidated or standalone, and quarterly average WACF versus the NCD’s contractual coupon.

Expected NIM effect

The unsecured structure generally implies a higher coupon than secured borrowing because investors bear greater credit risk. Therefore, all else equal, the NCD should create a negative marginal pressure on NIM if its proceeds are deployed into assets whose yields do not increase proportionately. The effect is not automatically a 12% reduction in NIM: NIM depends on the spread between the yield on incremental loans and the 12% funding cost, adjusted for funding mix and average earning assets.

A useful framework is:

Incremental spread = yield on loans funded by the NCD − 12%

Thus:

• Loan yield above 12% can preserve a positive spread, before credit costs and operating expenses.
• Loan yield close to 12% leaves limited room for credit losses, collection costs and overheads.
• Loan yield below 12% would be NIM-dilutive before those additional costs.

The precise NIM impact cannot be calculated without the latest reported WACF, incremental loan yield, deployment timing and average earning-asset base. The unsecured nature increases the likelihood that this is a relatively expensive marginal funding source, but it does not by itself determine the company-wide NIM impact.

Verdict: Assuming the full Rs 180 Crores unsecured NCD issue, including the green-shoe option, is allotted, unsecured NCDs would represent approximately 3.96% of Paisalo Digital’s post-issue borrowings:

Rs 180 Crores / (Rs 4,360 Crores existing borrowings + Rs 180 Crores new NCDs) = 3.96%

Paisalo’s latest reported total borrowings were Rs 4,360 Crores as of March 2026 ^[5], while the issue was approved for up to Rs 180 Crores, comprising a Rs 90 Crores base issue and Rs 90 Crores green shoe ^[6]. The cited announcement describes a proposed allotment, so this is a pro-forma calculation rather than a confirmed post-allotment balance. If only the base issue is allotted, the proportion would be approximately 2.02%.

Peer leverage

The 3.96% figure is a funding-mix ratio, not debt-to-equity leverage. On the latter measure, Paisalo sits in the middle of the relevant small-ticket NBFC peer set in a 15 July 2026 third-party comparison:

Paisalo’s leverage is therefore higher than SBFC’s but lower than MAS Financial and Fedbank Financial. The unsecured NCD tranche itself is small relative to the borrowing base and does not indicate a major change in capital structure.

For funding-mix context, Fedbank Financial’s NCDs represented 3.40% of total debt as of June 2025 ^[9], broadly similar to Paisalo’s pro-forma 3.96%. MAS Financial reported NCD funding at 16.06% of AUM as of December 2025 ^[10], but that denominator is AUM rather than total borrowings and is therefore not directly comparable. The balance-sheet takeaway is that Paisalo remains diversified across funding channels; this allotment adds a relatively modest unsecured capital-market component rather than creating concentrated NCD dependence.