In a move that has sparked significant buzz across Dalal Street, Shubhi Consultancy Services LLP, the investment arm associated with veteran market strategist Madhusudan Kela, has acquired 19,12,362 shares of 5paisa Capital at an average price of INR 292.94 per share, followed by additional accumulation at INR 290.69. This roughly translates to INR 56 crore investment.
This marks a strong institutional endorsement for the retail-focused fintech platform at a time when the sector is witnessing renewed optimism and consolidation. Market watchers are reading this as more than just a portfolio addition. Kela, renowned for identifying early-stage value in emerging financial players, appears to be betting on 5paisa’s digital transformation story, positioning it as a challenger to larger fintech rivals like Groww and Zerodha.
5paisa: From Discount Broker to Fintech Ecosystem
The timing of Madhusudna Kela’s buying in 5Paisa coincides with the company’s Q2FY26 results, which highlight the company’s evolving business model. Having started as a discount brokerage in 2016 and demerged from IIFL Holdings, 5paisa has now crossed 10 crore app users, with a customer base exceeding 50 lakh and 22.7 million app installs.
The company’s transformation into a scalable fintech platform is underscored by new offerings such as:
- FnO 360 and Scalper platforms for active traders
- Pay Later (MTF) and Margin Trading for leverage-based trading
- ETF dashboards, global investing access, and portfolio analytics tools
- AI-powered trading and client servicing initiatives
The company’s leadership, led by CEO Gaurav Seth and CFO Gourav Munjal, emphasises a “technology-first” approach with over one-third of its workforce in product and tech roles.
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Financial Snapshot: Profitability and Growth Amid Volatility
5paisa Q2 FY26 results reveal a mixed performance.
- Revenue stood at INR 77.3 crore, down 1% QoQ.
- Profit after Tax (PAT) came in at INR 9.5 crore, down 18% QoQ.
- Average Daily Turnover (ADTO) rose 18% QoQ to INR 2.68 lakh crore, indicating strong trading activity despite revenue compression.
- Mutual Fund AUM climbed to INR 1,647 crore (+5% QoQ).
The company continues to demonstrate operational scalability and improving financial resilience, with net worth rising to INR 626 crore as of September 2025. Importantly, broking remains its core revenue driver (45% of mix), but diversification into allied and tech-led services is accelerating.
Corporate Governance and Strategic Appointments
In November 2025, 5paisa announced the appointment of Mr. Zor Gorelov, a U.S.-based AI entrepreneur and founder of Kasisto, as an Independent Director. Gorelov brings deep expertise in artificial intelligence and digital transformation in fintech, further aligning 5paisa’s governance and strategy with global technology trends.
His addition signals the company’s ambition to leverage generative AI for user experience, compliance automation, and data analytics — potentially a differentiator in the competitive brokerage landscape.
Why Madhusudan Kela Might See Value
Kela’s investment thesis likely centres on 5paisa’s valuation gap versus peers.
While Groww, a privately held competitor, commands a multi-billion-dollar valuation in private markets, 5paisa trades at a fraction of that on the public bourses, despite serving a comparable retail clientele and showcasing strong technological infrastructure.
The strategic parallels to IIFL’s legacy of financial inclusion and the synergy between brokerage, lending, and wealth-tech may also align with Kela’s long-term investment philosophy. With retail participation in equity markets surging — over 4.6 crore active NSE clients as of August 2025 — digital platforms like 5paisa stand to gain significant tailwinds.
The Road Ahead: Potential Re-rating Candidate
Given 5paisa’s steady operational expansion, leadership strengthening, and fintech repositioning, many analysts believe the stock could be on the cusp of a market re-rating. Madhusudan Kela’s entry in 5paisa adds credibility and momentum to that narrative.
For investors, the key watchpoints in upcoming quarters will include:
- Revenue recovery and cost control post-regulatory changes in the F&O segment
- Adoption of new AI-driven tools is enhancing trading efficiency
- Client funding book growth (already up 17% QoQ)
- Continued improvement in ROE and net margins
Conclusion
Madhusudan Kela’s Shubhi Consultancy stake in 5paisa Capital is more than a high-conviction trade — it’s a statement of confidence in the digital democratisation of finance. As 5paisa strengthens its technology stack and governance framework, the company could emerge as India’s next-generation full-stack fintech platform, bridging the gap between traditional broking and intelligent digital investing.
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