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Religare Enterprises Limited (REL), which is on a turnaround, proposes to invest as much as ₹411-crore capital into its NBFC arm Religare Finvest Ltd (RFL), its Executive Chairperson Rashmi Saluja has said.
The funding for this capital infusion into RFL will come out of the latest ₹570-crore fund raise that REL Board approved on Tuesday via preferential issue to existing and marquee investors.
Nearly 80 per cent of REL’s planned ₹570-crore capital mop-up will come from existing investors. Burman family is investing ₹175 crore, taking the family’s shareholding in REL to 14.5 per cent from 11 per cent now. Ares SSG Capital, a global fund and another existing shareholder in REL, is pumping in ₹75 crore in the preferential issue, taking its shareholding from 6.8 per cent to 8 per cent.
Preferential allotment
Under the preferential allotment, as many as 5,41,56,761 equity shares of REL will be issued at price of ₹105.25/share, which is almost a 28 per cent discount compared to Tuesday’s close of ₹146.5 in the stock markets. On Wednesday, REL shares closed on the NSE at ₹135.55, down nearly 8 per cent over the previous close.
Asked if Burman family or Ares SSG Capital have made any formal requests for a Board seat in the wake of the proposed increase in their shareholding in REL, Saluja replied in the negative. She however maintained that REL was not averse to this and could look at it if there is interest on the part of the investors.
Meanwhile, Saluja said the remaining ₹160 crore out of the ₹570-crore fund raise would be infused in REL’s Housing Finance and stock Broking arms.
She also expressed confidence that REL will be able to soon recover the fixed deposit of ₹750 crore parked with Lakshmi Vikas Bank (now DBS Bank). Religare Finvest had a 2018 pending suit against LVB alleging misappropriation of its fixed deposits of ₹750 crore.
“We are very hopeful this FD money is going to come back to us soon. This will be another boost to REL besides the debt restructuring of RFL that has already been proposed and expected to be completed in next few months,” Saluja told BusinessLine .
She also said that REL will look to take Care Health Insurance public through an IPO although no timeline has been decided by the Board.
REL is the holding company for four key businesses i.e. SME Finance via Religare Finvest Limited (RFL), Health Insurance via Care Health Insurance Limited (CHIL), Retail Broking via Religare Broking Limited (RBL) and Affordable Housing via Religare Housing Development Finance Corporation Limited.
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