RBI approves Burmans' 26% stake buy in Religare; AGM scheduled for Dec 31

Shareholders of the firm to vote on Rashmi Saluja reappointment as director on Dec 31

Shareholders of Religare Enterprises (REL) will decide the future of the company's Executive Chairperson Rashmi Saluja, who is seeking reappointment as a director, at the annual general meeting (AGM) scheduled for December 31. The AGM comes just weeks after the Reserve Bank of India (RBI) on Monday approved the Burman family's plan to raise their stake in the company from 25 per cent to 51 per cent via an open offer.

 

The Burman family, which owns nearly 25 per cent of the financial services firm's stake, is likely to vote against Saluja's reappointment. This follows a revolt by the board of directors, led by Saluja, against the Burman family's attempt to acquire an additional 26 per cent stake through an open offer announced in September last year. The board had written to the regulators, saying the Burmans do not meet the "fit and proper" criteria of the RBI. The Burmans denied the board's allegations, saying they met all the criteria to acquire the firm.

 

The nomination and remuneration committee and the board of the company had proposed Saluja’s reappointment for shareholders’ consideration at the upcoming AGM. "The transformation during her tenure has led to the enhancement of shareholder value, as reflected by the surge in market capitalisation of Religare from less than US$100 million to over US$1 billion," the shareholders' notice stated. REL’s total market valuation was Rs 9,514 crore as on Tuesday on the BSE.

 

In its communication to Religare, the RBI stated that the Burman family, as acquirers, must consolidate the NBFCs (non-banking financial companies) within the resulting structure/group (both Burman and the Religare groups) by March 31, 2026, at the latest. "In this regard, the acquirers are advised to submit a concrete and specific consolidation plan, with timelines, supported by board resolutions from each of the NBFCs within the groups, within 90 days from the date of this communication," the RBI said in a letter dated December 9.

 

The RBI also highlighted that any adverse action against the ultimate beneficial owners of the acquirers by law enforcement agencies or any regulatory/court orders, affecting the entities or the acquisition itself, must be communicated to the central bank immediately. “Subsequent to this letter, if any adverse information or developments, or discrepancies in information regarding the acquirers or their promoters/promoter group, persons acting in concert, etc., come to the Reserve Bank's attention, it reserves the right to impose additional conditions or take other measures, including the withdrawal of approval," the RBI warned.

 

Additionally, the RBI stated that if the acquirers fail to acquire the proposed shareholding within one year from the date of this letter, its approval will be cancelled. "After the execution of the proposed change in shareholding, if the acquirers' shareholding in the NBFC falls below 26 per cent, prior RBI approval will be required to increase their shareholding to 26 per cent or more," the RBI letter specified.

 

The RBI also withheld approval for the proposed change in management, including the appointment of four directors — Abhay Agarwal, Arjun Lamba, Ramanathan Gurumurthy, and Suresh Mahalingam. "The NBFC is advised to submit the names of proposed directors along with the board resolution, ensuring that they are 'fit and proper’,” the RBI letter concluded.