The company, which started its journey in April last year, has nearly 7,500 retail customers as on date and has evolved into low-cost financial services provider with added business segments of mutual funds and insurance distribution.
“Most of the customers we have acquired are from the market and not IIFL customers. These are the customers who understand the benefits of discount broking and nearly 60 per cent of them have come from Tier-3 cities and beyond,” Gagdani said.
IIFL had pumped in ₹100 crore into this venture, which is now in the process of getting demerged and listed separately (likely in June-July), he added.
He also said that 5paisa.com will soon foray into funding (through an NBFC, which is part of IIFL Group) for IPOs, non-convertible debenture purchases, etc. Plans are also afoot to get into low-cost broking for commodities. “We are keen to enter commodities. In commodities, our business model makes even more sense. Our focus will be mostly on metals and bullion,” he said.
Gagdani said the discount broker model is “very much workable” in India. “Nowadays, the difference between full-service broker and discount broker is very thin. The only difference is research and advisory, which is a cost-heavy differentiating factor.
“The advantage of deep physical penetration across the country is gone with the latest mobile technology,” Gagdani told BusinessLine here. Irrespective of the trade size, 5paisa.com charges only ₹10 for one order as broking fee, he said.
For a retail investor to become a customer, there is no need for physical paper (online KYC was started in June last year). For customers with Aadhaar card numbers, the entire process will take just an hour. Gagdani said 5paisa.com will go in for capital raising by end-March 2018. “We are sufficiently capitalised for now,” he said.