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Religare Enterprises jumps on investment from US-based bank

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Capital Market
Last Updated : Jun 27 2013 | 11:30 AM IST

The announcement was made after market hours on Wednesday, 26 June 2013.

Meanwhile, the S&P BSE Sensex was up 182.38 points or 0.98% at 18,734.50.

On BSE, 28,000 shares were traded in the counter as against average daily volume of 21,435 shares in the past one quarter.

The stock hit a high of Rs 366 and a low of Rs 351.75 so far during the day. The stock had hit a 52-week high of Rs 377.25 on 3 July 2012. The stock had hit a record low of Rs 250.40 on 24 May 2013.

The stock had outperformed the market over the past one month till 26 June 2013, surging 16.28% as compared to the Sensex's 5.85% fall. The stock had also outperformed the market in the past one quarter, jumping 17.04% as compared to the Sensex's 0.81% fall.

The mid-cap company has equity capital of Rs 149.40 crore. Face value per share is Rs 10.

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Religare Enterprises (REL) said that Customers Bancorp Inc. (CUBI) will make a secondary purchase of $22 million of equity shares of REL from the promoters of REL. The promoters are selling the shares as part of their 22% divestment to bring down their shareholding to 49% to qualify REL to setup non operating financial holding company (NOFHC) as per Reserve Bank of India (RBI) Guidelines for Licensing of New Banks in the private sector issued on 22 February 2013. This transaction would be done as per applicable law at prevailing market price on date of purchase, REL and CUBI said in a joint statement. In addition, CUBI will make an investment for the Indian Rupee equivalent of $28 million in share warrants issued by REL on preferential allotment basis, as per Sebi floor price and as per applicable law. The warrants would be convertible into equity shares in maximum of 18 months, the companies said. CUBI will also subscribe to common equity shares of REL for the Indian Rupee equivalent of $1 million on a preferential allotment basis, as per Sebi floor price and as per applicable law.

REL and CUBI management teams have negotiated a term sheet based on which definitive documents are to be completed. The CUBI board has already given its approval to proceed with the transaction. REL and CUBI management teams will also enter into a business alliance agreement to find opportunities to service REL's customers across businesses, as well as potential customers of CUBI of India origin in the US for their India investment needs, the statement said.

Customers Bancorp Inc. is a bank holding company for Customers Bank based in Wyomissing, Pennsylvania. Customers Bank provides a full range of banking services to small and medium-sized businesses, professionals, individuals and families.

REL reported consolidated net loss of Rs 647.85 crore in Q4 March 2013, as against net profit of Rs 86.17 crore in Q4 March 2012. Total income declined 22.9% to Rs 1201.52 crore in Q4 March 2013 over Q4 March 2012.

Religare Enterprises is one of the India's leading diversified financial services groups. REL offers an integrated suite of financial services including asset management, life and health insurance, lending, broking, investment banking and wealth management.

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First Published: Jun 27 2013 | 10:06 AM IST

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