InvestorQ : How do you see the SBI Life decision to buy a stake in Paisalo Digital?
Sam Eswaran made post

How do you see the SBI Life decision to buy a stake in Paisalo Digital?

Moii Chavate answered.
3 years ago

Normally, PSU banks and their subsidiaries are known to be quite conservative about getting into Fintech segments but in this case, SBI Life appears to have taken a very clear stance that it wants to leverage Fintech in a big way. SBI Life reported that it had acquired an 8.99% stake in Paisalo Digital, triggering a 20% rally in the stock.

Paisalo Digital is listed on the NSE and the stock price is up nearly 5-fold since the lows of March this year. SBI Life actually purchased 38 lakh shares of Paisalo Digital via open market bulk deal. The stocks were bought at an average price of Rs.490 per share and the total value of the deal was worth Rs.186 crore.

The sellers included Antara India Fund, Elara India Opportunities Fund, Heshika Fund and Davos Fund. There were also other sellers who were selling smaller stake but their names were not disclosed. The stock of Paisalo Digital closed at Rs.624 on Monday and it was locked on 20% upper circuit. This stock has been in s sharp rally in the last few months.

Paisalo Digital is registered with the Reserve bank of India as a non-deposit taking NBFC and extends business loans to SMEs and to individuals. Paisalo, currently, manages the last mile loan customer management on behalf of a large PSU bank. This is a big value-added service for most PSU banks that do not have the wherewithal to manage the last mile lending.