Paisalo Digital Limited makes a corporate announcement

The filings do not disclose quarterly Cost of Funds or NIM for Q3 FY24 and Q4 FY24, so an exact QoQ movement in either metric cannot be established. The clean reported movement is in consolidated finance costs, which rose by Rs 21.78 Crores, or 33.94%, from Rs 64.18 Crores in Q3 FY24 to Rs 85.96 Crores in Q4 FY24 ^{[1] [2]}.

†Derived proxy: finance costs divided by revenue from operations. This is not Cost of Funds or NIM.

Debt-issuance attribution

The annual report lists four relevant late-Q3/Q4 NCD tranches at a 9.95% coupon: Rs 19.70 Crores allotted on December 15, Rs 18.00 Crores on December 28, Rs 19.71 Crores on January 18, and Rs 20.34 Crores on February 27. The NCD schedule is reported in lakhs ^{[4] [4]}.

• The two NCDs issued during Q4 FY24 — Rs 19.71 Crores on January 18 and Rs 20.34 Crores on February 27 — imply approximately Rs 0.57 Crores of Q4 coupon accrual on a simple day-count basis. This is only about 2.6% of the Rs 21.78 Crores increase in reported finance costs, and is a mechanical estimate rather than reported expense attribution.
• Including the December 15 and December 28 NCDs, the incremental coupon accrual in Q4 versus their brief Q3 holding periods is approximately Rs 1.40 Crores, equivalent to roughly 6.4% of the finance-cost increase. This remains only an NCD-specific estimate, not a company-level attribution.
• Commercial Paper issuance cannot be cleanly added: Q4 included two CP tranches with Rs 30 Crores maturity value each ^[4], while the November CPs had Rs 90 Crores of aggregate redemption value and matured in January-February ^[5]. This indicates potential refinancing or maturity replacement rather than a clearly identifiable net increase in funded debt.

Implication: the debt issuances plausibly contributed to higher funding costs, but the identifiable NCD coupon burden explains only a small portion of the Rs 21.78 Crores quarterly finance-cost increase. A definitive Cost-of-Funds or NIM bridge would require average interest-bearing borrowings, quarterly interest expense by instrument, CP discount rates, and quarterly NII/average earning assets—none of which are separately provided.

Including both recent NCD issuances, Paisalo raised approximately Rs 419.39 Crores at a face-value-weighted coupon of 10.23% and a weighted-average maturity of about 59.03 months, or 4.92 years. This is directionally consistent with the company’s stated strategy of maintaining positive ALM gaps and diversifying toward longer-tenor liabilities, although the 12% unsecured tranche raises the blended funding cost.

The public-issue calculation uses the number of NCDs as the weight because all six series had the same Rs 1,000 face value. The combined calculation treats 119 months and 26 days as approximately 119.87 months. The blended coupon is a nominal coupon measure, not the company’s all-in borrowing cost; it excludes fees and other issuance expenses.

ALM alignment

• Tenor diversification: The public issue creates a staggered liability ladder from 18 to 60 months, while the private placement adds a much longer-dated liability. This reduces dependence on frequent short-term refinancing and is consistent with management’s stated objective of strengthening and diversifying the liability franchise ^[8].
• Positive liquidity profile: The company’s stated ALM framework shows assets exceeding liabilities in the sub-six-month, sub-one-year and sub-three-year buckets—Rs 17,034 Mn versus Rs 6,989 Mn, Rs 14,139 Mn versus Rs 6,105 Mn, and Rs 23,760 Mn versus Rs 19,650 Mn, respectively ^[9]. The new NCD ladder should support that positive-gap approach.
• Important trade-off: The 12% unsecured NCD is substantially more expensive than the public secured issue’s 9.00%-10.47% coupon range ^[6]. It improves tenor and funding stability, but its economics depend on rapid deployment into earning assets. Management has acknowledged that debt issuance can temporarily precede loan-book deployment, creating a lagged interest-cost effect ^[10].
• Assessment: The funding structure is ALM-positive in tenor and refinancing-risk terms, but not cost-neutral. The key FY27 monitoring point is whether the long-dated borrowings are deployed quickly enough to preserve spreads and whether the company maintains positive maturity gaps after these issuances. The cited ALM disclosure is as of March 31, 2026; a separate post-issuance FY27 ALM target has not been reported ^[11].

Paisalo is predominantly an SME/MSME lender rather than a corporate lender. At FY26 year-end, its AUM was split between Small Income Generation (SIG) loans at 29.00% and SME/MSME loans at 71.00%. SIG AUM was Rs 1,769 Crores and SME/MSME AUM Rs 4,332 Crores, derived from reported AUM of Rs 17,693 million and Rs 43,316 million, respectively. ^[12] Paisalo does not separately report a corporate-loan AUM bucket; therefore, the 71.00% SME/MSME share should not be described as corporate exposure. ^[13]

AUM positioning versus the named peers

Peer read: Against the closest MFI-like comparator, MAS Financial, Paisalo’s SIG share is approximately 9.00 percentage points lower—29.00% versus 38.00%—but Paisalo’s 71.00% SME/MSME bucket is broader than MAS’s SME-loan category and cannot be equated with corporate loans. ^{[13] [14]} SBFC and Fedfina provide useful scale and ticket-size context, but their secured MSME and mortgage portfolios are not directly comparable to Paisalo’s SIG/MFI-style book. Bengal & Assam and Mrugesh Trading should not be included in an NBFC-MFI peer average.

Credit-cost trend for the small-ticket segment

The FY26 annual report does not report a Paisalo-specific credit-cost ratio or year-on-year credit-cost trend for its SIG portfolio. The closest disclosure is an industry impairment comparison for unsecured personal loans:

Interpretation: The reported industry trend was improving overall impairment from September 2024 to September 2025, but the smallest-ticket band still carried the highest impairment at the latest observation. That is an industry impairment statistic—not Paisalo’s segment credit cost—and the annual report does not provide a two-year SIG credit-cost series for Paisalo.