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Worst is behind, will complete RFL debt recast by Dec: Religare chairperson

The company has been in financial distress, primarily due to alleged misappropriation of funds by erstwhile promoters Shivinder Singh and his brother Malvinder Singh

Topics
Religare Finvest | Religare Enterprises | debt restructuring scheme

Press Trust of India  |  New Delhi 

Religare
Besides RFL, Care Health Insurance Limited (CHIL) and Religare Broking Limited are the other subsidiaries of Religare Enterprises.

Having paid Rs 6,500 crore to lenders since the change of management in 2018, Ltd (RFL) is likely to complete its debt restructuring by December and start new business from next financial year, Chairperson Rashmi Saluja said.

RFL, a NBFC arm of Ltd, has been barred from undertaking fresh business as it is under corrective action plan (CAP) of the Reserve Bank of India (RBI) since January 2018 due to its weak financial health.

The company has been in financial distress, primarily due to alleged misappropriation of funds by erstwhile promoters Shivinder Singh and his brother Malvinder Singh.

"Worst is behind...while all other business are performing, RFL is slowly getting out of woods. Two years ago, all four wheels (of RFL) were in the ditch and the wheels were stuck. Now the wheels are on the ground and we are refuelling for a take off," Saluja told PTI in an interview.

Besides RFL, Care Health Insurance Limited (CHIL) and Religare Broking Limited are the other subsidiaries of

Debt-ridden RFL also has a subsidiary, Religare Housing Development Finance Corporation Limited (RHDFCL), which is into affordable housing finance.

RFL is still combating the wrongdoings of the erstwhile promoters and others, who caused fraud of about Rs 4,000 crore, Saluja said, adding that legal and other means have been undertaken to recover the money.

Its transparent working, in tune with lenders and regulators, has earned appreciation from RBI and the Securities and Exchange Board of India (SEBI), she added.

"I am extremely proud to say that we have reached a position where Religare is now being appreciated by all the regulators by SEBI, by RBI, to whom we went suo moto. Whether it is SEBI or RBI, they have been extremely happy with our journey. We have been very transparent and keep RBI and SEBI updated about our actions," she said.

With regard to debt restructuring, Saluja said, about 7-8 meetings have already taken place with lenders on the issue since March and she is hopeful of achieving the recast by December.

The company has repaid close to Rs 6,500 crore since 2018, she said, adding that the total outstanding debt stands at Rs 4,600 crore and most of them are secured loans.

Once debt restructuring is done, she said, the next process would be to approach the regulator to consider removing the company from corrective action plan (CAP).

"With the blessing of RBI, we will be in a position to do fresh business from the next financial year," she added.

Asked about Religare Enterprises' future plans, Saluja said the organisation now has a robust team in place with professionals heading various businesses.

While health insurance and retail broking arms are flourishing, the housing finance company navigated through the COVID-19 period and is doing very well, she added.

The recently rebranded insurance business, CHIL (formerly Religare Health), achieved gross written premium of Rs 2,409 crore in FY20, she said.

Further, home grown private equity firm Kedaara Capital invested Rs 567.31 crore, including primary capital infusion and purchase of 6.39 per cent stake, in CHIL in June this year.

On the other hand, Religare Broking reported a consolidated revenue of Rs 220 crore in FY20. With 75 branches and more than 1 million customers, the daily broking turnover is around Rs 4,000 crore, she added.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Sun, October 04 2020. 15:37 IST
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