Shares of 5paisa Capital Ltd. hit an upper circuit after the discount broker's board approved a fundraising plan.
The company will raise Rs 250.8 crore through preferential issue, according to an exchange filing. Equity shares and warrants will be issued at a price of Rs 500 apiece, a premium of over 70% to Tuesday's closing.
The equity shares will be allotted to a set of marquee investors, while promoters and promoter group will be allotted warrants. Each warrant issued, the company said, is convertible into one equity share.
WF Asian Reconnaissance Fund Ltd. will be issued 23.77 lakh equity shares for Rs 118.87 crore.
FIH Mauritius Investments Ltd. will be issued 8.98 lakh equity shares for Rs 44.91 crore.
HWIC Asia Fund Class A shares will be issued 3 lakh shares worth Rs 15.05 crore.
Rimco India Ltd. will be issued 2.4 lakh shares worth Rs 12 crore.
Promoters Nirmal and Madhu Jain will be issued 4.8 lakh warrants worth Rs 24 crore each.
Venkataraman Rajamani will be issued 2.4 lakh warrants worth Rs 12 crore.
“Investment from such marquee investors and promoters is a strong vote of confidence on our business model,” Prakarsh Gagdani, chief executive officer at 5Paisa Capital, was quoted as saying in the filing. “The availability of equity funds will help the company accelerate its investment in customer-centric technology and sustain the pace of growth.” The CEO also said the company is looking to add more products to its basket after broking, peer-to-peer lending, international stocks, and gold investing, among others.
Shares of 5paisa Capital hit the 20% upper circuit at Rs 350.4 apiece—it's highest in three months. This is also the biggest single-day gain in two years.
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