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The company has cited market volatility and a significant decline in the market price of the company’s shares as the primary reasons behind the withdrawal of the preferential issue.
Paisalo Digital shares are down 10% over the last one month and have corrected 60% from the peak of ₹99.6, which they had hit on March 1 last year.
The company’s shareholders had approved the issue of convertible warrants on January 22 this year, while both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) had granted in-principle approval for this on February 14.
“The current market conditions are marked by increased volatility, as the stock market has faced significant fluctuations that have negatively impacted investor sentiment. This volatility, further compounded by declining share prices, which have consistently decreased, making it difficult for potential investors to justify engaging in new issuances,” the company said in a statement.
Paisalo Digital further said that this disparity has resulted in a lack of investor interest and confidence in participating in the preferential allotment. Therefore, the company announced the withdrawal of the preferential issue
“The withdrawal of the preferential allotment will not affect the company’s financial stability, operations or growth prospects,” Paisalo Digital said, adding that it remains committed to exploring alternative avenues to raise capital when market conditions improve.
Shares of Paisalo Digital ended 0.4% lower on Friday at ₹40.65. The stock is down 18% so far in the first two months of 2025.
