SEBI rejects US-based Danny Gaekwad's bid to pick up 26% stake in Religare Enterprises

The Securities and Exchange Board of India (SEBI) has rejected the competing open offer from US-based Danny Gaekwad Developments & Investments for the acquisition of a 26 percent stake in Religare Enterprises Ltd (REL). The regulator stated that the offer did not comply with required regulations.

In a communication to REL on January 28, SEBI clarified that the "letters submitted by Digvijay Laxmansinh Gaekwad" were being returned, as they did not qualify as an exemption application under Regulation 11 of the SEBI (SAST) Regulations, 2011. The rejection referenced an email from January 25, 2025, which included a letter from Gaekwad's entity, Danny Gaekwad Developments & Investments, based in Florida.

Danny Gaekwad Developments & Investments had proposed acquiring a 26 percent stake in Religare Enterprises at a price higher than the one offered by the four Burman family-controlled entities. Gaekwad, a self-proclaimed globally recognized investor, offered Rs 275 per share — 17 percent more than the Burmans' offer of Rs 235 per share.

The Burman family's open offer to acquire an additional 26 percent stake in REL commenced on January 27 following regulatory approval. The offer covers up to 90,042,541 fully paid-up equity shares, representing 26 percent of REL's expanded voting share capital. If approved, the Burman family's stake in REL will rise to 53.94 percent.

The Burman entities involved in the open offer include Finmart Private Ltd, Puran Associates Private Ltd, VIC Enterprises Private Ltd, and Milky Investment & Trading Company. As of September 30, 2024, these entities collectively owned 25.12 percent of REL.

In September 2023, the Burman family — promoters of Dabur India and other companies like Eveready Industries — through its entities, announced an open offer worth Rs 2,116 crore to acquire up to a 26 percent stake in REL.

Following the open offer, the Burmans raised a complaint with SEBI regarding insider trading violations by the chairperson and her board appointments.

This was challenged by REL’s independent directors, who flagged concerns about fraud and other alleged violations by the Burman family entities and reported the matter to regulators including SEBI, RBI, and the Insurance Regulatory and Development Authority.

(With inputs from PTI)