Discount broker 5Paisa.com is planning to raise about ₹103.5 crore through a rights issue to enter the peer-to-peer (P2P) lending business, said chief executive Prakarsh Gagdani in an interaction with Mint.
5Paisa.com is a discount broker, which was listed in November 2017. The company is backed by the IIFL group, which is engaged in distribution of financial services and broking. It plans to use the funds for investing in improvisation of technology platform, scaling up its business operations and invest in alternative businesses.
“The fund infusion will help us in expanding our current business and enter into new businesses. We are planning to start P2P lending business soon,” said Gagdani.
5Paisa has applied for a P2P licence with the Reserve Bank of India and is waiting for the approval. “P2P lending is a 100% digital business and fits into our digital platform philosophy. With the rise of working young generation and acceptance of digital lending by millennials, we expect P2P to be an area of interest,” Gagdani added.
The company offers a platform for buying stocks, derivatives, mutual funds, insurance and personal loans. It is among the early entrants into the online discount broking space and competes with Zerodha, RKSV, Samco Sec, SAS online, Trade Smart Online and Policybazaar.com.
5Paisa.com claims to have over 1 million users on its mobile platform and aims to add another 1 million customers this year. It has a daily average turnover of ₹9,000 crore, the company said.
It targets the do-it-yourself (DIY) customer segment, and has a robo-advisory platform, which addresses all the financial needs of an individual and helps in planning and buying mutual funds and insurance products, including life, health and motor cover, along with low-cost broking in equity.
This article was first published by livemint.com