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Ward Ferry, Fairfax, others to invest in discount broker 5paisa Capital

By Beena Parmar

  • 14 Apr 2021
Ward Ferry, Fairfax, others to invest in discount broker 5paisa Capital
Credit: 123RF.com

The board of IIFL Holdings-owned 5paisa Capital, the only publicly listed discount broker, has approved fundraise worth about Rs 250 crore (around $33.4 million) through preferential allotment of equity shares and warrants. 

Hong Kong-based investment firm Ward Ferry has proposed to invest about Rs 119 crore (around $15.8 million).

FIH Mauritius Investments, which is fully owned unit of Prem Watsa-owned Fairfax India; HWIC Asia Fund; and RIMCO India will also invest, 5paisa Capital said in a filing. 

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Promoters Nirmal Jain, Madhu Jain and R Venkataraman will subscribe to warrants in the allotment.  

The shares and warrants are proposed to be sold at Rs 500 per share, which is a premium of over 70% to Tuesday’s closing price of Rs 292 on NSE, the filing stated. 

The preferential issue is subject to shareholder and other necessary approvals. 

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Founded in 2016, 5paisa Capital, a subsidiary of Jain-promoted IIFL Holdings, owns and operates an online technology platform for trading. 

It offers financial services including depository services; distribution of mutual funds, bonds, and debentures; and equity and mutual fund research. 

5paisa Capital also provides term, life, health, and car insurance and investment products. The firm offers short-term courses on the equity market, mutual funds, derivatives, etc. 

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In October 2016, IIFL Holdings demerged 5Paisa Digital Undertaking from the company into 5Paisa Capital. 

As on December end 2020, 5Paisa Capital’s promoter Nirmal Jain and group owned 34.58% of the company. 

FIH Mauritius Investments held 26.57% stake, HWIC Asia Fund 8.90%, Bank Muscat India Fund 3.96% and Ward Ferry 2.07%. 

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For the December quarter, 5paisa Capital swung to a net profit of Rs 3.19 crore from a loss of Rs 2.16 crore a year ago. Its total income almost doubled to Rs 49.61 crore during the period. 

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