Want to become a 360 degree financial services company: Religare's Saluja

Rashmi Saluja, executive chairman, Religare Enterprises (REL), talks about the company’s growth with Manojit Saha. Its wholly-owned subsidiary Religare Finvest (RFL) has completed its one-time-settlement (OTS) with 16 lenders by making a full and final payment of Rs 400 crore. Edited excerpts:

Now that all the dues are paid to the lenders, what are your growth plans?

The OTS has been a long journey, almost four years. During these four years, when things were progressing, we already planned the way forward for Religare Enterprises, and its subsidiaries. Religare Enterprises is a core investment company (CIC) and it is investing in its subsidiaries. It is also open to certain strategic investments for its growth. We have four subsidiaries – Care Health Insurance, RFL, Religare Broking, the oldest flagship company, and Religare Housing Development Finance Corp – which works on the affordable housing space. This is now a subsidiary of RFL, which we want to bring to the REL level.

When do you expect to come out of the RBI’s prompt corrective action (PCA) framework?

RBI, as a regulator, is defined in its regulatory processes, and there is nothing left for interpretation. Any company, which has to come out of the corrective action, has to go through its processes. Now, we have completed the OTS, based on the entire parameters whether it is capital adequacy ratio etc…we meet those requirements, and subsequent to that, it is not a tedious process. I hope when we get the no-dues certificate from the lenders, we will be going ahead and applying for removal of the cap. It looks like it is a one to one-and-half month process.

There is a plan to raise Rs 600-Rs 700 crore via QIP. When do you expect that to happen?

Now, it is time for us to unlock wealth. We want to become a 360 degree financial services company for which we have certain projections and targets. These are to get into asset reconstruction business, alternative investment fund business, wealth management and similar synergistic business, which the existing management can start. For these reasons, we need some capital. Around Rs 600 crore to Rs 700 crore is something we are looking at. We will be taking our plans to existing and potential shareholders. Then it will take three to four months – before the RBI cap is removed.

Do you expect some existing promoters to increase their stake?

When we do the preferential round or when we do the QIP, the first task for us is to go to the shareholders who were with us through thick and thin. We would be very happy if they participate in this and increase their shareholding. We are also open to other institutional investors to participate in Religare if they believe that the company has its strength.

All the companies, except RFL, which is yet to start its business, have become profitable and lead companies in their sectors. I am sure that investors, existing and others, would be very happy to participate.

What are the growth plans for Religare Finvest?

Stabilising the company is important. Once it is fully stable, compliance and governance would be areas the company would work on as a major pivot. The aim is to create a granular book and focus on the MSME space. We also understand the healthcare sector – that is one area which we are bullish about. We are also hopeful on the agri space. From next year onwards, we will be reaching out to the markets and the banks – because we will be constantly needing bank support. We are not in a hurry. We are not orthodox but conservative. This year is stabilising, next year is growth.

Is there a plan to unlock the value of Care Healthcare – the health insurance arm of Religare Enterprises? And Religare Broking…

First you have to create the value, then you have to unlock – that is the logical conclusion for any organisation. We are definitely moving in that direction, not only for Care but for broking also. For broking, we have set a target of two years for an IPO. Whatever value unlocking we do (for Care) has to be in accordance with regulatory compliance. If we have to see the IRDAI guidelines and if we fit into those guidelines as far as value unlocking is concerned, whether it is through a de-merger or an IPO, we will definitely move in that direction.