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.
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.
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.
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%.
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.