5paisa Capital, a discount broking unit belonging to Nirmal Jain-controlled IIFL Group, has decided to buy IIFL Securities’ online retail broking business in an all-stock deal. Post the transaction, IIFL Securities will focus on wealth management and advisory services. The merger is part of IIFL’s move to restructure its listed broking subsidiaries.
Shares of 5Paisa Capital NSE 0.85 % and IIFL Securities NSE 0.59 % zoomed up to 8% in Wednesday’s trade after the former announced the acquisition of the latter’s online broking business.
Following the announcement, shares of 5Paisa Capital zoomed about 8% to Rs 351.75 on Wednesday, before giving up gains. The scrip had settled at Rs 327.35 on Tuesday. Shares of IIFL Securities surged 6% to Rs 72.4 during the session. The scrip had settled at Rs 68.45 in the previous session.
The boards of IIFL Securities and 5paisa approved the merger on Tuesday. The shareholders of IIFL Securities will receive one share of Rs 10 paid-up equity of 5Paisa Capital for every 50 shares of Rs 2 paid-up equity of IIFL Securities.
The merger will increase 5paisa’s customer base by about 40% to 4.7 million. 5paisa.com, which is backed by Canadian billionaires, Prem Watsa’s Fairfax, and Ward Ferry, is the sixth-largest broker in India in terms of customers.
The other listed group entity that rebranded itself as 360 One last month – will cater to ultra-high. On the other hand, IIFL Securities will focus on wealth management and advisory for individuals with capital between Rs 10 lakh and Rs 25 crore, said the sources from IIFL Group.
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