Religare Enterprises Faces Downturn as Burman Group Announces Open Offer at 13% Discount
In a significant development, M.B. Finmart Private Limited, Puran Associates Private Limited, VIC Enterprises Private Limited, and Milky Investment & Trading Company, all part of the renowned Burman group, have jointly unveiled an open offer to acquire up to 90,042,541 fully paid-up equity shares of Religare Enterprises Limited.
This strategic move comes as these four entities, collectively holding a 26.52 percent stake in Religare Enterprises, take steps in accordance with Securities and Exchange Board of India (SEBI) regulations, which mandate an open offer when an entity acquires a 25 percent stake in a listed company.
The Burman family’s offer represents an additional 26 percent of the company’s expanded voting share capital. Should the open offer prove successful, the Burman family’s stake in Religare Enterprises will rise to 53.94 percent.
The offer price for each equity share has been set at Rs 235, totaling up to Rs 2,115 crore in cash. Notably, this offer price represents a 13 percent discount compared to the stock’s last closing price of Rs 271.55.
In response to this development, the stock experienced a sharp decline of over 6 percent at the market’s opening, with a 5.58 percent drop from the previous close, trading at Rs 256.40 at 9:20 am.
Religare Enterprises issued a statement in its exchange filing, stating, “The acquirers intend to take control of the target company once the open offer is concluded in accordance with the provisions of the SEBI (SAST) Regulations. The acquirers reserve the right in the interim period, pending completion of the open offer, to appoint directors to the board of directors of the target company.”
Religare Enterprises, headquartered in Mumbai, offers a diverse range of financial services across more than 400 cities, including SME loans, affordable housing finance, health insurance, and retail broking.
For the June quarter, this small-cap financial services firm reported a reduced standalone net loss of Rs 6 crore, a significant improvement from the Rs 14 crore loss in the same period last year. During the quarter, total revenue increased to Rs 8 crore compared to Rs 7 crore the previous year, while total expenses remained relatively stable at Rs 20.48 crore.
On a consolidated basis, Religare Enterprises recorded a net profit of Rs 93 crore, a remarkable turnaround from the Rs 76 crore loss in the corresponding quarter a year ago.
This development marks a crucial juncture in Religare Enterprises’ journey, with the Burman group’s open offer setting the stage for potential changes in the company’s ownership and future direction.
