Online discount broker 5paisa.com has approved a capital raise of INR 250.87 Cr through a preferential issue of equity shares and warrants at INR 500 per share, which is a premium of over 70% to the company’s share’s closing price of INR 293 on the National Stock Exchange (NSE) on Tuesday.
The company has issued 23,77,000 equity shares to WF Asian Reconnaissance Fund Limited to raise INR 118.87 Cr, 8,98816 equity shares to FIH Mauritius Investments to raise INR 44.94 Cr, 3,01,185 equity shares to HWIC Asia Fund to raise INR 15.06 Cr, and 2,40,000 equity shares to RIMCO India Limited to raise INR 12 Cr. The remaining INR 60 Cr has been raised from the company’s promoters, Nirmal Jain, Madhu N Jain and Venkataraman Rajamani by issuing warrants.
“Investment from such marquee investors and promoters is a strong vote of confidence on our business model. The business has been witnessing rapid growth. In the midst of a growing number of players, 5paisa has carved out a robust customer franchise. The availability of equity funds will help the company accelerate its investment in customer-centric technology and sustain the pace of growth,” said Prakarsh Gagdani, CEO at 5paisa.com.
5paisa.com claims to have more than 1.3 Mn customers, 6.5 Mn mobile app users and claims to be one of the fastest-growing discount broking companies in India. The company offers broking, mutual funds, insurance, peer-to-peer lending, international stocks, gold investing and margin funding as part of its product bouquet. 5paisa.com reported an income of INR 144.7 Cr for the first nine months of the financial year 2021, up 98% year-on-year.
Founded in 2016 by Gagdani, 5paisa.com is one of the many digital platforms in India today that allow retail investors to trade in stocks through a single window. The company competes with digital platforms such as ETMONEY, Paytm Money, Upstox, Zerodha as well as the online investment platforms run by traditional banks and lenders.
Investment tech startups such as 5paisa, along with EarlySalary, CASHe and ZestMoney also have Spot stores on the Google Pay app. Google’s Spot feature allows businesses to set up virtual stores on the platform.