Shares of Religare Enterprises Ltd, a listed Core Investment Company (CIC) registered with the Reserve Bank of India as a non-deposit taking NBFC, climbed nearly 9 per cent in Friday's trade, as the company informed stock exchanges that the Burman family has acquired a controlling stake after the completion of the open offer. Religare Enterprises said the Burmans held 83,201,819 equity shares in the company, representing 25.16 per cent stake.
Following the development, the stock climbed 8.52 per cent to hit a high of Rs 242 on BSE. Religare had no promoters since February 2018.
The Burman family is now likely to infuse Rs 2,000 crore the funds initially earmarked for the open offer by subscribing to preferential shares, thereby increasing their stake to over 50 per cent, ET reported citing sources. The new promoters, the report suggested, are expected to undertake a rebranding exercise, which may include renaming the company and its subsidiaries in the coming months. This would be done to align with the Burmans' strategic vision, sources told ET.
The Burmans acquired 2,31,025 equity shares on February 17, representing 0.07 per cent, of the outstanding paid up share capital. In addition, further to the completion of acquisition of shares by the acquirer under the open offer, the Burmans had already acquired 13,200,000 equity shares, by way of purchase orders executed on January 31, 2024, representing 3.99 per cent, of the outstanding paid up share capital as at the date, which have been transferred from escrow demat account to the respective acquirer account on February 18.
"Consequent to the change of control, the acquirers are the promoters of the target company," Religare said.
To recall, the Burman family had made an open offer to acquire up to 9,00,42,541 equity shares, or 26 per cent of Religare, from public shareholders. The acquisition was to be made through entities owned by the family, including M.B. Finmart Private Limited (MFPL), Puran Associates Private Limited (PAPL), VIC Enterprises Private Limited (VIC), and Milky Investment & Trading Company (MITC).
The group was holding 21.54 per cent equity shares of Religare Enterprises. It proposed to buy from the market up to 5.27 per cent of equity shares of REL, at a price of not more than Rs 235 per equity share, on September 25, 2023.
Later, Digvijay Laxhamsinh Gaekwad (Danny Gaekwad Developments & Investments, Florida) requested SEBI to grant requisite exemption from strict enforcement of Regulation 20 of the SAST Regulations, 2011 to allow it to make a competing offer for 55 per cent of outstanding equity share capital of Religare Enterprises, at a price of Rs 275 per equity share. SEBI later rejected that application, saying Digvijay Laxhamsinh Gaekwad failed to demonstrate his ability to meet the financial obligation for making the competing open offer.