5Paisa Capital Ltd., hived off from financial services provider IIFL Holdings Ltd. last year, will become India’s first online trading firm to list on exchanges today.
IIFL investors will get 25 shares of 5Paisa for every share held. The shareholding pattern will mirror that of its parent. The company is 35.48 percent owned by Canada-based billionaire Prem Watsa’s Fairfax Group and 29 percent by Nirmal Jain-led promoter group, according to its statement.
5Paisa is a platform for stocks, derivatives, mutual funds, alternative investment funds, bonds and debentures, insurance and personal loans. It competes with top discount brokers like Zerodha, RKSV, Samco Sec, SAS online, Trade Smart Online and policbazaar.com.
“More than 60 percent of our clients come from tier 3, tier 4 and smaller towns and millennials form a large part of the customer base considering we are mobile-first and 100 percent online,” Prakarsh Gagdani, chief executive officer at 5Paisa Capital, told BloombergQuint.
The 18-month-old company received Rs 100 crore from the parent as part of the scheme of arrangement. It has a daily equity turnover of Rs 3,000 crore, aided by its Rs 10 flat brokerage fee per order, the company said in an emailed statement. Besides discount broking, 5Paisa is growing its mutual fund business and targets Rs 100 crore assets under management in next 12-15 months, it said.
The company’s revenue stood at Rs 33.32 crore for the quarter ended September. It reported a net loss of Rs 54.98 crore as employee and administration costs rose.