Burmans Launch Open Offer to Acquire 26% Stake in Religare Enterprises
Open Offer Commences January 27
The Burman family's open offer to acquire an additional 26% stake in Religare Enterprises Ltd (REL) is scheduled to begin on January 27, following regulatory approvals. This move comes after the Reserve Bank's approval last month. The Burmans, known for their association with FMCG giant Dabur, aim to increase their stake in the non-banking financial company.
Current Stake and Target Acquisition
Currently, the Burmans hold a 25.12% stake in REL through four entities: M.B. Finmart Private Ltd, Puran Associates Private Ltd, VIC Enterprises Private Ltd, and Milky Investment & Trading Company. The open offer targets the acquisition of up to 9,00,42,541 fully paid-up equity shares, each with a face value of ₹10.
Offer Details and Timeline
The open offer represents 26% of the expanded voting share capital of REL. According to the tentative schedule, the offer will close on February 7. This strategic move by the Burman family was initially announced in September 2023 as part of a ₹2,116-crore proposal to REL shareholders.
Concerns Raised by REL's Independent Directors
Despite this initiative, REL's independent directors have raised concerns. They allege fraud and other breaches by the Burman family entities and have approached regulators such as SEBI, RBI, and the Insurance Regulatory and Development Authority for intervention. The Burman family is not only associated with Dabur India but also with other entities such as Eveready Industries. Their decision to increase their stake in REL reflects their continued interest in expanding their influence within the financial sector.
This acquisition attempt highlights the Burmans' strategic approach to consolidating their position in REL. Market participants and regulators will be closely monitoring the outcome of this open offer.
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