Want proposed acquirers to be more responsible to Religare: Rashmi Saluja

Religare shares sluggish as open offer is delayed

Value unlocking by Religare Enterprises, which is engaged in a takeover battle with the Burman family, is stalled due to the “irresponsibility” of the acquirer, said Rashmi Saluja, the company’s chairperson.

“We want proposed acquirers to be more responsible towards other shareholders and help us unlock the value of the company. The management can’t help in getting a fit and proper tag from the regulator, and the ball is in their court,” Saluja said.

The Burman family, the promoters of the Dabur group, made an open offer in October last year to acquire an additional 26 per cent stake in Religare, and the regulators have not yet cleared the open offer. Religare shares closed at around Rs 212 on Friday. 
 

The open offer was made at around Rs 235 a share, but the Religare board has rebelled against the Burman acquisition, saying the offer does not reflect the true value of the company. 
 

“Though the open offer didn’t disturb the way we run the company, the value of small shareholders is getting eroded as the open offer price doesn’t reflect the true value and potential of the company.” she said. 

“All four companies of the Religare group are doing well financially, and the fraud tag on our non-banking financial company has gone, and the one-time settlement with our lenders has also taken place. The focus now is on unlocking the future potential of Religare Enterprises,” Saluja told Business Standard.

Saluja said everyone has to take responsibility and make sure that other shareholders do not suffer. “We are growing organically, with a 59 per cent compound annual growth rate (CAGR), and have seen increased interest from investors who are keen to seek clarity on the status of the open offer. They believe in the potential of the company and its growth under the Religare Resurgence strategy to make the business an integrated financial services conglomerate,” she said.

“They (Burman family) should decide whether they will remain invested or exit, though they can remain as a shareholder,” she said. Before the open offer, Religare share price was hovering at around Rs 280 a share as investors were satisfied with the management team’s performance and the board that has championed the revival of the business over the last six years,” she said.

Saluja said the management wants to unlock value for shareholders and “we are hopeful that a decision is taken on the lacunae in the proposal of the open offer”.

“We have reached a stage of organic growth and have created a value 360-degree financial services business. So far, 21 banks have received their money back worth around Rs 12,000 crore, and we created value for the shareholders. Since the management and the board have revived the business, the share price has risen from around Rs 17 to around Rs 280 until the open offer, which eroded shareholder value,” she said.

“They want to acquire the company cheaply, but the growth of the company is inevitable and visible to the employees and small shareholders who are losing out at the current market price. We have requested regulators to look into the matter, and they are appreciative of our compliance as management and the board," she said.

Religare, Saluja said, wants to go aggressive on the BFSI segment. “We are creating an in-house digital solutions team for broking. We also think that AI is the way forward as health tech, fintech picks up. We also want to grow via acquisitions,” Saluja said.

“I have been meeting my shareholders over the past five years. Banks have reversed their losses, and they are happy. All of us have invested in the company,” she said.

On her ESOPs, Saluja said these were granted in a formula based on the market price. “We are not only invested via hard work but also with her hard-earned money. Faster resolution to the problem is necessary, but the open offer has stopped our way forward,” she said.