Religare Enterprises jumped 5.99% to Rs 163.55 after the company said that its subsidiary, Religare Finvest (RFL) has completed the entire one time settlement (OTS) payment of Rs 2,178 crore to sixteen OTS lenders.
RFL will receive the No-Dues Certificates (NDC) from the OTS lenders as per the terms of the OTS agreement.
Earlier, it was disclosed that on account of various issues emanated from the erstwhile promoters, RFL was facing a significant asset-liability mismatch and to overcome the same, various steps have been taken for revival including extending a OTS proposal to the lenders.
RFL had executed OTS agreement on 30 December 2022 along with REL (the parent company) with all sixteen secured lenders (OTS lenders) for full & final settlement with respect to their outstanding dues including dues towards their unsecured exposure.
The company said that the OTS was completed by making a full and final payment of Rs 400 crore well in advance of the three-month deadline as per the settlement agreement made with the lenders.
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Since January 2018, when the new management took over, RFL has repaid over Rs 9,000 crore to its lenders from its collections and through the support of REL.
This settlement paves the way for restarting of business of RFL and focusing on building a niche in the Ministry of Micro, Small & Medium Enterprises (MSME) lending space. RFL will have a healthy balance sheet to sustain business growth in the next few quarters, the company stated in the press release.
In continuation of its objective of focussing on the rapid growth of its affordable housing finance business, RFL's subsidiary RHDFCL will be made a direct subsidiary of REL in due course.
On this development, Dr Rashmi Saluja, executive chairperson, Religare Enterprises, said, RFL OTS is one of its kind revival wherein the management has been able to conclude the legacy issues faced by Religare Group on account of fraudulent activities of erstwhile promoters and has still paid a significant amount to lenders while preserving the long term value of the Religare Group. I am very confident that Religare 2.0 will be able to grow faster, as well as a foray into newer businesses to become a 360-degree financial services group and enhance value for all its stakeholders.
Pankaj Sharma, CEO of Religare Finvest, said, Post the one-time settlement, RFL has embarked on its journey to revive its business, having achieved a critical milestone to strengthen its financials and meet regulatory ratios. Going forward, we will continue to focus on lending to micro and small enterprises (MSMEs) by building a granular book and create a niche for RFL in this critically important segment for growth of Indian economy.
Religare Enterprises, a Core Investment Company (CIC) registered with Reserve Bank of India (RBI), is a diversified financial services company. It offers an integrated suite of financial services through its underlying subsidiaries and operating entities, including loans to SMEs, Affordable Housing Finance, Health Insurance and Retail Broking.
The company reported a consolidated net loss of Rs 117 crore in Q3 FY23 as against a net loss of Rs 249.64 crore posted in Q3 FY22. Total income jumped 32.6% year on year to Rs 1,168.61 crore during the quarter.
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