Religare Enterprises plans QIP after paying unit’s settlement sum

Lenders to Religare Finvest and the company reached a settlement on 30 December. Saluja said 83.6% of the amount was paid off to lenders on the next day, while the balance, around ₹400 crore, will be paid off by January-end. REL will give the funds to Reliance Finvest, which will transfer it to banks.

“The QIP for ₹700 crore to ₹800 crore will be to put into strengthening our bouquet of offerings whether it is an ARC (Asset Reconstruction Company) or a wealth management business," Saluja said. The Burman family of consumer goods maker Dabur, and one of the financial investors in REL with a more than 14% stake, is waiting for the management to present a plan. “We are financial investors in Religare. The current board and management have to make a plan and present it to us. Once we are satisfied only then will we decide whether we will want to increase our stake," Mohit Burman, Dabur chairman, who is invested in Religare in his personal capacity said in an emailed response.

In June 2021, REL raised ₹570 crore from distressed assets investor Ares SSG, the Burman family and other investors to fund its units.

Saluja said the company has yet to reach out to new or existing investors, though it expects a favourable response in light of the market’s ‘stable’ response. The company’s shares ended Tuesday at ₹182.5 apiece, rising 8.66% in the past five days. She said the company plans to list the Religare Broking unit separately in two years.Meanwhile, REL’s immediate goal is to assess how much capital needs to allocated to individual units once the OTS for the NBFC arm is settled. The company expects investor interest from existing and new investors, including private equity firms, she said.

“We were waiting for OTS to work out well. Now, we have to carefully analyse and assess the requirements of funds for the existing businesses and how much to stake for newer businesses. As of now, we have not reached out to any investor, existing or new," Saluja added.

REL has four units – Religare Finvest, the NBFC arm which has just reached a settlement with banks for its outstanding debt. Soon, the company will apply to move out of RBI’s corrective action plan, which will allow it to grow further, it said.

The other units are Religare Broking, Kedaara Capital-backed Care Health Insurance Ltd, retail broking arm Religare Broking, and affordable housing unit Religare Housing Development Finance Corp.

The health insurance unit Care Health Insurance raised ₹300 crore in November 2022, which saw promoter REL and existing investors such as Kedaara Capital participating.

Saluja said with the exception of the NBFC unit, all the other three businesses have been profitable.

“Broking and securities have turned profitable in the most difficult times of covid. And again, it is actually getting into its glory as a lot of technology platform has been built in- house; we are acquiring technology as well. And I’m actually looking to get to the next level of either acquisition of more such businesses," Saluja said.

She said Religare will look at strategic acquisitions for broking, whereby it will enter insurance broking. “And then we’re also looking at starting with ARC and then also do wealth management. We want to become a 360-degree financial services as well," she added.

Once the OTS is closed, the NBFC arm plans to focus more on SME lending, do more retail and smaller ticket size loans, Saluja said.

While the NBFC unit was not doing any collections and recoveries, the team was focussing on evaluating new business opportunities national and internationally and identifying areas of growth. “We have created some niche areas and healthcare funding is one of them. That’s one of our very, very important areas that we will be allocated," she added.

The housing arm is focusing on affordable housing with ticket sizes of around ₹10 lakh to ₹15 lakh. “We will also allocate some resources for acquiring new businesses. Because we want to grow organically and inorganically both—so that is the way forward," Saluja added.

Religare reported total income of ₹1183.3 crore and loss of ₹176.7 crore for the September quarter. The company’s market cap was ₹5496.17 crore, as of Tuesday on the BSE.