Anand Rathi buys Religare’s wealth management arm

Anand Rathi Financial Services Ltd has acquired the wealth management arm of Religare Enterprises Ltd (REL), according to a communication from the latter’s manager to a client.

“Religare has decided to exit the wealth management business and the same has been bought over by Anand Rathi Wealth Management,” a message from Religare’s relationship manager to one of the clients read. “We shall keep you posted on all developments proactively...” said the message, which was reviewed by Mint.

Separately, two people aware of the development, said the two financial services firms were in talks. One of these two said the talks were in advanced stages and the transaction would be officially announced in the coming weeks.

Spokespersons for Anand Rathi Financial Services and Religare Enterprises declined comment.

Religare currently manages assets close to Rs4,500 crore while Anand Rathi has total assets worth Rs10,000 crore under management (AUM) catering to high networth individuals (HNIs).

In 2013, REL acquired the stake held by its partner Macquarie Group Ltd in Religare Macquarie Wealth Management Ltd for an undisclosed sum following which the business was renamed as Religare Wealth Management Ltd (RWML).

The company reported a loss of around Rs8 crore on revenue of Rs25 crore in FY2016, according to its latest corporate filings.

The sale of the wealth management business to Anand Rathi is part of Religare group’s overall restructuring process initiated by group founders Malvinder and Shivinder Mohan Singh who have been trying to cut debt at various levels by divesting promoter holding in part or full in various group companies. In November, Mint reported that RHC Holding Pvt. Ltd (RHPL), one of the holding companies of Religare Enterprises, was in talks to refinance close to $300 million of its short-term debt.

VCCircle had first reported on Tuesday that Religare is in an advanced talks with a Mumbai-based financial services firm to sell its wealth management business.

Mint reported in January that global private equity funds Bain Capital, KKR, and TPG are in talks to acquire a majority stake in Fortis Healthcare Ltd (FHL), promoted by the Singh brothers.

Mint had further reported that the Singh brothers plan to transfer the ownership of Fortis Hospitals from Singapore-exchange listed Religare Health Trust to the balance sheet of Fortis Healthcare Holdings Pvt. Ltd (FHHPL), the holding company of Fortis Healthcare with an objective of improving the valuation of FHHPL.

Last year, Religare Global Asset Management, a group company, sold a dedicated credit fund to Baring Private Equity Asia. Under Religare, the fund had made 21 private debt investments with a total transaction value of $160 million.