5Paisa going places, Street debut comes next

5Paisa.com, a unit of IIFL Group which was among the early entrants into online broking, will soon make its debut on the bourses.The financial services company , in which Canada-based billionaire Prem Watsa holds 31%, has decided to hive off 5paise.com and list it as the concept of trading shares, buying mutual funds and insurance products picks up across the country .
“IIFL Holdings has approached exchanges to demerge 5Paisa Capital and list it on the exchange in next 4 6 months after completing all formalities,“ said Nirmal Jain, chairman, IIFL.

5Paisa.com will be the first online trading firm to be listed on Indian bourses. The firm offers trading, investment and insurance products online at a flat rate.

As per the terms of the proposed scheme of arrangement, IIFL will invest `100 crore into this company .Also, shareholders of IIFL will get 1 share of `10 each of 5Paisa for every 25 shares of IIFL held.

“5Paisa will acquire, service and grow the new emerging DIY (Doit-yourself) customer segment who prefer least cost for various financial products,“ said Jain.“Such organisations require a different structure and culture.Therefore, the board has decided to fund and demerge 5Paisa to seize the opportunity of such new DIY customer segment“.

5Paisa.com will compete with top discount brokers such as Zerodha, RKSV , Samco Securities, SAS Online, Trade Smart Online among others on equity side and online insurance portals such Policybazar.com and Coverfox.

Shares of IIFL gained about 13% in the last one month. In July , the firm said the UK governmentowned CDC Group will invest about `1,000 crore in its unit India Infoline Finance.

According to Jain, 5Paisa.com would be the first flat-fee brokerage portal to sell all investment products like equity , derivatives, mutual fund and insurance products.