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Customers Bancorp, based in America, will invest $51 million (Rs 305 crore) in Religare Enterprises. The deal is part of an exercise to bring the promoter stake in the latter down to 49 per cent, to meet the norm for a new bank licence.
According to Wednesday’s closing price of Religare at Rs 340, Customers Bancorp’s stake works out to be nearly six per cent in the company.
Reserve Bank of India norms on a bank licence call for having a non-operative financial holding company owned by the promoter company, in which public shareholding should be a minimum of 51 per cent. Currently, the promoters hold 71.75 per cent stake in the company.
Customers Bancorp will make the investments through fresh issue of shares, as well as purchase in the secondary market. Last week, Religare promoters Malvinder Mohan Singh and Shivinder Mohan Singh decided to sell nearly 22.75 per cent stake, worth about Rs 1,000 crore.
Of the total investment, the Wyomissing, Pennsylvania-based Customers Bancorp will purchase shares worth $22 mn from the promoters. It will also make an investment worth $28 mn towards the preferential allotment of warrants issued by the company, to be converted into equity in a maximum of 18 months. And, buy shares worth $1 mn issued on a preferential basis.
“The Customers Bancorp management team expertise in global banking will be extremely supportive in our banking foray,” said Sunil Godhwani, chairman and managing director, Religare.
Both companies will also enter into a business alliance to find prospective customers for each other in the respective countries. Jay Sidhu, chairman and chief executive officer, Customers Bancorp, said: “Our management team’s extensive banking experience will be available to Religare in its banking foray.”
