5paisa Capital Faces ₹3 Lakh SEBI Penalty for Non-Compliance in Online Bond Platform Operations

5Paisa Capital , a prominent player in the financial services sector, has recently come under regulatory scrutiny. The Securities and Exchange Board of India (SEBI) has imposed a penalty on the company for non-compliance related to its Online Bond Platform Provider (OBPP) operations.

Penalty Details

SEBI has levied a joint and several penalty of ₹3.00 lakh on 5paisa Capital Limited and two of its executive directors. This action follows an inspection of the company's OBPP operations conducted by SEBI.

Non-Compliance Issues

The regulatory body observed certain non-compliances with the provisions of the SEBI NCS (Non-Convertible Securities) Master Circular during its inspection. The examination was carried out to assess compliance with the SEBI (Stock Brokers) Regulations, 1992, read in conjunction with the NCS Regulations.

Key Points of the Penalty Order

Aspect	Details
Penalty Amount	₹3.00 lakh
Parties Involved	5paisa Capital Limited and 2 Executive Directors
Date of Order Receipt	October 13, 2025
Regulations in Question	SEBI NCS Master Circular

Company's Response

5paisa Capital Limited has stated that apart from the imposed penalty, there has been no significant impact on its financial, operational, or other activities. The company has also noted that one of the penalized executive directors is no longer associated with the firm.

Regulatory Disclosure

In compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 5paisa Capital Limited has made the necessary disclosures to the stock exchanges. The company affirmed its commitment to maintaining high standards of corporate governance and assured continued compliance with SEBI Listing Regulations.

This incident underscores the importance of strict adherence to regulatory guidelines in the financial services sector, particularly in emerging areas like online bond platforms. It also highlights SEBI's ongoing efforts to ensure transparency and compliance in the securities market.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.03%	-1.48%	-12.08%	-15.50%	-38.49%	-2.56%

5Paisa Capital , a leading fintech and discount broking firm, has reported mixed results for the second quarter while positioning itself for fintech expansion through an AI-led trading ecosystem. The company is experiencing growth in retail trading volumes and margin-funding business momentum, despite facing challenges in some areas.

Key Financial Highlights

Revenue: The company's consolidated income stood at ₹773.00 crore, down 1% quarter-on-quarter (QoQ).
Profit After Tax (PAT): 5Paisa Capital reported a PAT of ₹95.00 crore, marking an 18% decrease QoQ.
Average Daily Turnover (ADTO): The ADTO increased to ₹2.68 trillion, up 18% QoQ.
Client Base: The total client base grew to 50.10 lakh, a 2% increase QoQ.
Margin Trading Facility (MTF) Book: The average client funding book size expanded to ₹3,643.00 crore, showing a significant 17% growth QoQ.

Operational Performance

5Paisa Capital experienced contrasting trends in its operational metrics:

Customer Acquisition: The company added 95,000 new clients during the quarter, a 20% increase from the previous quarter.
Mobile App Performance: The 5paisa mobile app recorded over 22.70 million installs, maintaining a 4.2-star rating on the Play Store.
Broking Income: The broking income saw a slight decline of 2% QoQ, settling at ₹348.00 crore.

Market Dynamics and Company Strategy

Gaurav Seth, Managing Director & CEO of 5Paisa Capital, commented on the quarter's performance: "During the quarter, markets remained volatile with persistent FII selling, offset by strong DII inflows. While ADTO declined across Cash and F&O segments, the industry's MTF book witnessed strong traction, crossing ₹1 lakh crore."

The company focused on quality customer acquisition, which led to improvements in Customer Acquisition Cost (CAC) and First Year Revenue (FYR). Notably, 5Paisa Capital surpassed the 5 million customer milestone during this quarter.

Product Enhancements and Innovations

5Paisa Capital continued to enhance its product offerings:

Introduced a new "Pay-Later" option in the Margin Trading Facility.
Expanded the MTF universe to over 1,200 scrips, up from 700.
Launched a dedicated ETF Dashboard for improved investing experience.
Implemented upgrades in digital onboarding and mutual fund sections.
Introduced advanced trader tools like Strategy Analyzer and Alpha Scan.

Board Appointment and AI-Led Transformation

In a significant move to bolster its technological capabilities, 5Paisa Capital appointed Mr. Zor Gorelov as an Additional Non-Executive Independent Director. Mr. Gorelov brings over 25 years of experience in the software industry, with expertise in AI and fintech. His appointment is expected to drive AI-led transformation within the company, aligning with 5Paisa Capital's focus on creating an AI-led trading ecosystem.

Future Outlook

Despite the challenges faced in the quarter, 5Paisa Capital remains committed to innovation and leveraging AI to enhance customer experience. The company's focus on expanding its MTF book, introducing new features, and positioning itself for fintech expansion indicates a strategic approach to capture market share in a competitive landscape.

As the financial markets continue to evolve, 5Paisa Capital's ability to adapt, innovate, and capitalize on the growth in retail trading volumes will be crucial in maintaining its position as a leading discount broking firm in India.