 "Burman family secures Sebi approval for 26% open offer in Religare")
The Burman family, promoters of consumer goods giant Dabur, have obtained all necessary regulatory approvals for its open offer to acquire an additional 26 per cent stake in Religare Enterprises Limited (REL), according to a report by The Economic Times. This move is expected to give the family majority control of the non-banking financial company (NBFC), despite opposition from the current management.
The Securities and Exchange Board of India (Sebi) recently approved the Burman family's proposed offer, joining prior endorsements from the Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India (Irdai), Competition Commission of India (CCI), and stock exchanges.
The report indicates that the Burmans plan to launch the open offer by mid-January 2024. If successful, the family's total stake in REL will surpass 50 per cent, effectively transferring management control to the Dabur promoters.
Opposition from Religare management
The open offer, priced at Rs 235 per share and amounting to Rs 2,116 crore, has faced resistance from Religare’s current leadership, headed by chairperson Rashmi Saluja. The management has raised concerns over the "fit and proper" credentials of the Burman family and questioned the offer price, which is significantly lower than REL's current trading price of Rs 310 per share.
Religare’s management also argued that the Burmans' bid undervalues the company, which has seen its stock surge 38 per cent over the last six months.
All about Religare open offer
The Burman family, already the largest shareholder in Religare with a 25 per cent stake, announced the open offer in September 2023. Their initial entry into the company came through share warrants representing a 10 per cent stake, which were later converted to equity. Over time, the family increased its stake to around 22 per cent, triggering regulatory requirements for the open offer upon announcing plans to acquire an additional 5 per cent through the secondary market.
The open offer could reshape REL’s governance and strategic direction, bringing it under the control of the Dabur promoters. However, with REL’s stock trading significantly above the offer price, investor response to the deal remains uncertain.
Stakeholders are yet to make any official announcement on the matter.