The shares of 5Paisa Capital Ltd. gained the most in seven weeks on the acquisition of IIFL Securities Ltd.'s online retail trading business.
The acquisition will increase 5Paisa Capital's customer base by 40%, while equity dilution will be 20%, the company said in its exchange filing.
Shareholders of IIFL Securities will receive one share of 5Paisa Capital carrying a face value of Rs 10, for every 50 shares of IIFL Securities having a face value of Rs 2 held by them on the record date.
"This entire acquisition happened because we both are discount brokerage companies with 100% online business, of which 80% is mobile-app driven," said Chief Executive Officer Prakarsh Gaadani of 5paisa.
"As a group, 5Paisa will focus on the retail part of the business, and IIFL will focus on the HNI business... 5Paisa will acquire almost 15 lakh customers as a part of this acquisition," Gaadani told BQ Prime.
This entire deal will help 5paisa grow its customer base by 70–80%, which will also contribute to revenue growth, according to Gaadani. "We anticipate an increase in revenues of 18% to 20%."
"This deal will not have any impact on customer acquisition, and we are looking at improvements in our PAT margins and ROE," he said.
The single analyst tracking the stock maintains a "buy" rating, according to Bloomberg data.
Shares of the company rose 1.49% to Rs 333.35 apiece as of 1:35 p.m., compared with a 0.17% decline in the benchmark Nifty 50. The total traded volume rose by more than 1.32 times on Wednesday, as per BSE.
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