FOUNDATION MAGAZINE FINANCIAL ADVICE STOCKLETTERS PORTFOLIO PMS BOOKS
BUY
Burman Family's Open Offer for Religare Enterprises Cleared by RBI
Moneylife Digital Team 10 December 2024
Economy & Nation
The Reserve Bank of India (RBI) has approved the Burman family's open offer for Religare Enterprises Ltd (REL). In a regulatory filing, REL says it received a letter dated 9 December 2024 from RBI conveying the central bank's approval for the proposed increase in shareholding by existing shareholders from the Dabur owner family. On Tuesday, REL ended 3.75% up at Rs288 on the BSE, while the 30-share Sensex closed flat at 81,510 points.
 
In the letter, RBI says, "...we convey our approval for the proposed increase in shareholding of existing shareholders (hereon referred to as 'acquirers' viz. Puran Associates Pvt Ltd, VIC Enterprises Pvt Ltd, MB Finmart Pvt Ltd and Milky Investment & Trading Company) in terms of para 27 of Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016 dated 25 August  2016, as amended from time to time."
 
The approval is subject to certain conditions. "The acquirers are advised to consolidate the non-banking finance companies (NBFCs) in the resulting structure or group (both Burman and Religare group) at the earliest and not later than 31 March 2026. In this regard, the acquirers are advised to submit a concrete and specific consolidation plan, with specific timelines, duly supported by board resolutions from each of the NBFCs within the groups, within 90 days from the date of this communication."
 
"REL shall inform RBI about the date on which the acquirers have acquired 26% or more of the paid-up share capital of the NBFC," it added.
 
In September 2023, the Burman family, through its group entities, made an open offer for REL. The Burman family holds a 21% stake in REL through MB Finmart, Puran Associates, VIC Enterprises and Milky Investment & Trading.
 
The open offer to the public shareholders was at Rs235 per equity share aggregating a total consideration of Rs2,116 crore assuming full acceptance of the open offer, subject to the terms and conditions mentioned in the public announcement dated 25 September 2023 and to be set out in the detailed public statement and the letter of offer that are proposed to be issued in accordance with the Securities and Exchange Board of India (SEBI) (Substantial Acquisition of Shares and Takeovers) (SAST) Regulations.
 
The proposed combination envisages the acquisition of 5.27% of the total issued and outstanding equity share capital of Religare through open market purchases and an open offer for up to 26% of the total expanded voting share capital of Religare under the provisions of the SEBI (SAST) Regulations, 2011.
 
 
REL is registered as a systematically important non-deposit-accepting NBFC and as a core investment company with the RBI. It is engaged in the financial services business through its subsidiaries and operating entities, specifically in the business of general insurance, provision of loans to SMEs, housing finance and retail broking.
 
In July this year, while slapping a penalty of Rs1 crore on Care Health Insurance Ltd (CHIL), the insurance regulatory and development authority of India (IRDAI) asked the subsidiary of Religare Enterprises Ltd to buy back within 30 days 7.57mn (million) shares allotted to Dr Rashmi Saluja, the non-executive director and chairperson of Religare. 
 
The ESOP shares in question are valued at around Rs250 crore and have become a point of contention between the Religare board, led by Dr Saluja and the Burman family, which has invested around Rs900 crore to Rs1,000 crore in Religare. 
 
In a letter on 10 May 2022, IRDAI directed CHIL to refrain from issuing stock options to Dr Saluja as per the 2016 remuneration guidelines issued by the regulator. 
 
However, it found that CHIL granted 22.71mn ESOPs, of which 7.57mn ESOPs were exercised by Dr Saluja on 4 October 2023, even after the rejection of the request to approve the issuance of ESOPs by IRDAI. (Read: IRDAI Slaps Rs1 Crore Penalty on Care Health Insurance, Asks It To Buy Back ESOPs from Religare Chief Rashmi Saluja) 
 
You may also want to read...
 
Comments
Economy & Nation
ARCs – The Charade of Asset Reconstruction
Dr Rajendra M Ganatra, 13 December 2024
India’s credit recovery legislations have been unmitigated failures. Until 1985, for credit recovery from non-performing assets (NPAs), the courts of law would take eons to dispose the recovery petitions. The Sick Industrial Companies...
Economy & Nation
Car Sales Fall 13.7% in November, Limited Relief for 2Ws from Rural India: FADA
Moneylife Digital Team 09 December 2024
Despite subdued marriage season sales, the spillover of festive buying from October helped two-wheeler (2W) registrations reach an all-time high in November. However, weak market sentiment, limited new launches and the early festive...
Economy & Nation
Business This Week
Moneylife Digital Team 06 December 2024
RBI Holds Rates Steady
The Reserve Bank of India (RBI) kept its key interest rate unchanged at 6.50% and lowered its economic growth forecast for FY24-25 to 6.6%, down from 7.2%. RBI also reduced the cash reserve ratio (CRR) for...
Economy & Nation
IndiGo Takes Mahindra Electric to Delhi HC Over Use of ‘6E’ for Its New Electric Car
SN Thyagarajan (Bar  and  Bench) 03 December 2024
India’s largest airline IndiGo has filed a suit before the Delhi High Court for infringement of trademark against Mahindra Electric Automobile Limited for using ‘6E’ in its new car called Mahindra BE 6E, which is expected to be...
ArrayArray
  • EDITORS'
    PICKS
  • MOST
    POPULAR
  • MOST
    READ
Free Helpline
Legal Credit
Feedback
Buy Now!

Absolute Power

Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam

View Options

The Scam: Now in it's 12th Printing

29 Years Of The Scam: The Perennial Bestseller, reads like a Thriller!
#Scam92: Read the actual story.

Buy Now Gift Know More

Moneylife Online Magazine

Fiercely independent and pro-consumer information on personal finance.

1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.

Buy Now Gift Know More

Monthly Digital Access

Fiercely independent and pro-consumer information on personal finance.

30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.

Buy Now Know More

Full Archive access

Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )

Buy Now

Stockletters in 5 Flavours

Outstanding research that beats mutual funds year after year

Buy Now Know More

MAS: Complete Online Financial Advisory

(Includes Moneylife Online Magazine)

Buy Now Know More
We are listening!
Reset
Success!

To continue

Please

or

With