IIFL Online Retail Broking business shall be managed along with 5Paisa Online Discount Broking Business

To facilitate growth & rapidly changing dynamics in “Discounted Broking Business,” in 2016, IIFL Group demerged its “Discount Broking” arm from the group’s listed holding company IIFL Holding Limited (Now IIFL Securities Limited) and listed it separately as 5paisa Capital Limited. Broking business catering to relatively higher financial asset customers continued to be with IIFL Holdings Limited. Over a period, the group went under multiple restructuring and change in business dynamics ushered in conflict of interest with its listed discount broking company.

IIFL Securities Limited (“Demerged Company” or “IIFL”) is one of the leading players in the financial services sector offering equity, currency and commodity broking, depository participant services, merchant banking and distribution of financial products. The Demerged Company is a member of BSE Limited, the National Stock Exchange of India Limited, Multi Commodity Exchange of India Limited, National Commodity & Derivatives Exchange Limited and registered with National Securities Depository Limited and Central Depository Services Limited as depository participants. The equity shares of the Demerged Company are listed on BSE and NSE.

5paisa Capital Limited (“Resulting Company” or “5paisa”) is engaged in providing an online technology platform for trading in NSE, BSE and MCX through web-based trading terminal, mobile application and a state-of-the-art call and trade unit. The equity shares of the Resulting Company are listed on BSE and NSE.

Both companies are controlled by the same group. In 2016, 5paisa was separately listed on bourses pursuant to the demerger of 5paisa digital undertaking from IIFL Securities Limited (erstwhile IIFL Holdings Limited) into 5paisa.

In 2019, IIFL group collapsed its holding-subsidiary structure through mega restructuring which pawed the way for separate listing of its wealth, securities business.

The proposed transaction

The Board of Directors of both Companies (“the Board”) at its meeting held on December 6, 2022 has considered and approved the Scheme of Arrangement (“Scheme”) between IIFL and 5paisa which inter alia provides for the demerger, transfer and vesting of the Online Retail Trading Business of IIFL into 5paisa.

“Online Retail Trading Business” as defined under the Scheme means the Broking business predominantly involving retail individual investors undertaking trading and investment activities through online Broking platform including Do-It-Yourself (DIY) customers.