5paisa Capital To Acquire IIFL Securities' Online Retail Trading Business: ICICI Direct

ICICI Direct Report

5Paisa Capital Ltd. is a leading discount stock broker backed by the Nirmal Jain led IIFL group.

The boards of IIFL Securities Ltd. and 5Paisa Capital approved the transfer of former’s online retail trading business to 5Paisa Capital subject to statutory approvals. The reorganisation between the two IIFL Group entities aims to consolidate online retail trading businesses under one single entity.

Business reorganisation has been undertaken to mitigate overlap and, thus, focus on scalability, profitability and efficient utilisation of capital.

Accordingly, ~15 lakh low ticket size customers which contributes ~5% of average daily turnover (low ticket size defined as customer with asset base of up to Rs 10 lakhs) will be shifted to 5Paisa Capital from IIFL Securities.

Following the transfer, 5Paisa Capital will issue its one share of Rs 10 paid up for every 50 shares of Rs 2 paid up in IIFL Securities held by them as on the record date.

Acquisition will increase scale for 5Paisa. Client base will increase from ~32 lakh to ~47 lakh with market share rising from current 3.2% to 4.5%.

Proposed dilution will be 16.58% after issue of additional shares (on the basis of post issue of shares).

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