Discount broker 5paisa.com to raise Rs 250 crore from warrants, preferential issue

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Mumbai: Listed discount broker 5paisa.com on April 14 said it is raising Rs 250 crore through a preferential issue of shares to investors and warrants to promoters.

The investment will be made by Ward Ferry, Fairfax and RIMCO, along with the promoter group, which includes IIFL’s Nirmal Jain, Madhu Jain and R Venkataraman, an official statement said.

The issue of shares and warrants will be done at the price of Rs 500 per share, which represents a premium of 70% over April 13’s closing price of Rs 293 on the NSE, the statement added. It can be noted that the equity broking space, especially discount brokers like Zerodha, have seen a huge surge in activity after the onset of the pandemic, as investors trooped in to participate in the equity markets.

Giving details of the investment through the preference issue, the statement said Nirmal and Madhu Jain will invest Rs 24 crore each, Venkataraman (Rs 12 crore), WF Asian Reconnaissance Fund (Rs 118.87 crore), FIH Mauritius Investments (Rs 44.94 crore), HWIC Asia Fund Class A Shares (Rs 15.06 crore) and RIMCO India (Rs 12 crore).

5paisa.com said its board has approved the fundraise, which will have to be approved by the shareholders of the company. A notice of postal ballot for the issue will be issued on April 14 and the e-voting will be held between April 15 to May 14.

“The availability of equity funds will help the company accelerate its investment in customer-centric technology and sustain the pace of growth,” its chief executive Prakash Gagdani said, adding that the firm has witnessed rapid growth despite competition.

The company said it has 13 lakh customers and 65 lakh mobile app users and offers broking, mutual funds, insurance, peer-to-peer lending, international stocks, gold investing and margin funding as part of its product bouquet.