The Securities and Exchange Board of India (SEBI) has granted its approval for the Burman family’s open offer to acquire an additional 26% stake in Religare Enterprises Ltd (REL), a move that could lead to a change in management control of the non-banking financial company (NBFC). This development follows the Reserve Bank of India’s (RBI) conditional nod earlier in December, marking the final regulatory clearance for the promoters of Dabur to proceed with their bid.
The Burman family, which currently holds a 25% stake in Religare, announced their intention to acquire an additional 26% stake for ₹2,116 crore in September 2023 under SEBI’s Substantial Acquisition of Shares and Takeovers (SAST) regulations. If successful, this acquisition would push their total stake above 50%, securing majority control over the NBFC and potentially reshaping its strategic direction.
The open offer, triggered when the Burman family’s holding surpassed the 25% threshold, required multiple regulatory approvals due to Religare’s involvement in financial services and insurance. Earlier this month, the RBI approved the proposal with specific conditions, including the submission of a “concrete” consolidation plan with defined timelines and the completion of the acquisition within one year. Additionally, the RBI directed that Religare’s current management structure remain unchanged, denying the Burman family’s request to appoint new directors, such as Arjun Lamba, Abhay Agarwal, Ramanathan Gurumurthy, and Suresh Mahalingam.
Other regulatory clearances were previously secured from the Competition Commission of India (CCI), the Insurance Regulatory and Development Authority of India (IRDAI), and the stock exchanges, paving the way for SEBI approval.
With the regulatory process now complete, the Burman family is expected to launch the open offer by mid January 2024. This move could mark a significant turning point for Religare, a company that has been diversifying its operations and rebuilding its business after facing financial setbacks and governance issues in the past.
Religare’s stock has reflected strong investor confidence, rising nearly 3% on December 20 and delivering a 45% gain over the past year, pushing its market capitalisation beyond ₹10,000 crore. The Burman family’s strategic investment could further strengthen the NBFC’s position in India’s competitive financial services sector.
As the promoters of Dabur, one of India’s leading FMCG giants, the Burmans bring extensive business acumen and capital resources to Religare. Analysts believe this development signals a renewed growth trajectory for the company, particularly in sectors like insurance and lending, where Religare has a notable presence.
