The shares of a Small-cap company specializing in offering a variety of services, including loans, housing finance, health insurance, and retail broking jumped upto 10 percent following the acquisition of a controlling stake by the Burman family
Price action
With a market capitalization of Rs. 7,612.20 crores on Friday, the shares of Religare Enterprises Limited jumped upto 9.5 percent making a high of Rs. 242.00 per share compared to its previous closing price of Rs. 223.00 per share.
What Happened
Religare Enterprises Limited engaged in offering a variety of services, including loans, housing finance, health insurance, and retail broking has rallied upon the Burman family taking control of the Delhi-based financial services company, marking the end of an 18-month takeover battle.
The Burman family has acquired a controlling stake in Religare Enterprises Limited (REL) after the completion of the open offer.
Burmans’ open offer
- In September 2023, the Burman family announced plans to raise their stake from 21 percent to 25.5 percent through open market purchases and in the end held ~25 percent stake in the company.
- Following this as per Indian regulations, owning 25 percent of a listed company requires the acquirer to make an open offer for an additional 26 percent of the shares leading to a total 51 percent stake.
- As a 51 percent stake is considered controlling, granting decision-making power over the company, following which the Burman family’s open offer was opposed by the company’s senior management, led by Chairperson Rashmi Saluja, citing undervaluation.
- The matter went to court after the offer was approved by RBI and SEBI in December.
- In January 2025, Digvijay Danny Gaekwad, a US-based Indian businessman, offered Rs. 275 per share for a 26 percent stake, higher than the Burmans’ Rs. 235 per share offer, but SEBI rejected Gaekwad’s offer, citing non-compliance with takeover rules and missing deadlines.
- When the Burmans launched their offer in late January, The company’s management attempted to make a counteroffer but the management’s counteroffer did not succeed.
In the end, the Burmans acquired an additional 25.16 percent stake in Religare Enterprises through four companies: MG Finmart, Puran Associates, VIC Enterprises, and Milky Investment & Trading Co, and gained control of Religare Enterprises, becoming promoters of the financial services company and putting an end to the story
About the Company
Religare Enterprises Limited is a diversified financial services company based in India. It operates in various sectors including insurance, asset management, lending, and healthcare, and provides a range of financial products and services to individuals, corporations, and institutions.
Financials
The company’s total revenue rose by 8.6 percent from Rs. 1,537.24 crore to Rs. 1,670.24 crore in Q3FY24-25. Meanwhile, Net profit rose from a profit of Rs.33.58 crore to a loss of Rs. 63.28 crore during the same period.
Written by Sridhar J
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