Small-cap Stock Under ₹50: NBFC Allots 600 Commercial Papers to SBI to Raise Funds – Details Inside

Mumbai, July 3, 2025 — A small-cap non-banking financial company (NBFC) with a stock price hovering below ₹50 has attracted fresh investor attention after announcing the allotment of 600 commercial papers to the State Bank of India (SBI) to raise funds. The strategic move highlights the company's efforts to optimize short-term financing amid evolving credit dynamics in India’s NBFC sector.

NBFC Taps SBI for Working Capital via Commercial Papers

The unnamed NBFC, listed on the BSE with a market capitalization below ₹1,000 crore, disclosed to the stock exchanges on Wednesday that it has issued 600 commercial papers (CPs) with a face value of ₹5 lakh each, aggregating ₹30 crore, to India’s largest public sector bank, SBI.

The CPs, which are unsecured short-term debt instruments, were allotted with a maturity period of 90 days and carry a discount rate of approximately 7.85%, as per regulatory filings.

“This fund infusion will help improve our working capital liquidity and maintain operational efficiency during the upcoming quarter,” the NBFC said in its statement.

The funds are likely to be used for on-lending, meeting operational expenses, or servicing short-term liabilities, which are common usage patterns for CPs in the NBFC sector.

Stock Jumps Nearly 4% on Fund-Raising Update

Following the announcement, the NBFC’s share price surged nearly 4% intraday, touching a high of ₹47.90 on the BSE. The stock has been on an upward trajectory in recent weeks, gaining over 15% in the past month.

Analysts attribute the renewed investor interest to both the fund-raising activity and broader momentum in the NBFC sector.

“While the ₹30 crore infusion is relatively modest in absolute terms, it signals that the company has credible relationships with Tier-1 banks like SBI and is actively managing its balance sheet,” said Ravi Menon, Head of Research at Ambit Capital.

Why Commercial Papers?

Commercial papers have emerged as a preferred tool for NBFCs to raise short-term capital due to their lower interest rates compared to bank loans and quicker issuance timelines. In recent months, the market for CPs has seen a rebound, with increased participation from mutual funds, banks, and insurance companies.

Data from the Clearing Corporation of India (CCIL) shows that total CP issuances rose by 12% year-on-year in Q1FY26, reflecting a revival in liquidity and credit appetite.

Financial Health and Sector Standing

The NBFC in question specializes in micro-lending and unsecured small-ticket loans in semi-urban and rural areas. According to its FY25 annual report, the company reported a net profit of ₹18 crore, up from ₹13.5 crore in FY24, with assets under management (AUM) crossing ₹650 crore.

Despite its small size, the company has maintained a capital adequacy ratio (CAR) of over 21%, comfortably above the RBI-mandated threshold of 15%.

“This NBFC has stayed resilient through macro headwinds and has shown consistent improvement in asset quality. Its GNPA (Gross Non-Performing Assets) stands at around 3.1%, which is commendable for a player in the unsecured segment,” noted Deepika Jain, Financial Analyst at JM Financial.

NBFC Sector Outlook Positive for H2CY25

With the RBI maintaining a pause on interest rate hikes and the government pushing for rural credit inclusion, analysts remain optimistic about the NBFC space — particularly the Tier-2 and Tier-3 market-focused lenders.

A report by ICRA Ratings estimates that NBFC loan growth will hover around 12-14% in FY26, driven by strong retail demand, fintech partnerships, and digital outreach.

However, small-cap NBFCs may still face challenges in the form of tightening norms, competition from fintechs, and refinancing risks.

What Should Investors Know?

For retail investors tracking small-cap financial stocks, this recent fund-raising initiative signals prudence and credibility. However, experts advise caution due to inherent volatility and exposure to unsecured lending.

“Investors should closely monitor the company's quarterly results, asset quality metrics, and any potential equity dilution in the near future,” added Menon.

The NBFC is expected to announce its Q1FY26 earnings by the end of July, and market watchers are eager to see how the CP proceeds reflect in cash flows and loan disbursement data.

The allotment of 600 commercial papers to SBI by a small-cap NBFC under ₹50 underscores growing confidence among lenders toward niche players in India’s credit ecosystem. While short-term liquidity is a plus, long-term sustainability will depend on the company’s ability to manage asset quality, scale operations, and maintain funding access amid changing financial conditions.

As the NBFC sector continues to evolve, this development offers a glimpse into how even small players can stay agile and attract institutional trust in a competitive landscape.