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Mumbai: Religare Finvest has completed its one-time settlement of 2,178 crore with all 16 lenders, five years after it was put under a corrective action plan as advised by the Reserve Bank of India. The non-bank subsidiary of Religare Enterprises Ltd (REL) owed 5,300 crore to a consortium of lenders led by State Bank of India. In an interview, Rashmi Saluja, executive chairperson of REL, said that the group is now focused on getting a business plan approved for all its business, including broking and housing loans, along with a rebranding exercise. Once the business plan is in place over the next 2-3 months, the group will focus on raising capital. Edited excerpts:

How will you proceed now that the one-time settlement has been completed?

We are planning to create, acquire, or tie up a lot of synergistic businesses, which will also be standalone businesses but will also utilize the crew’s internal strengths. So, we are looking to create a 360-degree financial services company. While REL would still be focusing on developing the strength of existing businesses, the money that we would need is also for this kind of inorganic growth. So, we would be trying and raising money around 600-700 odd crore so that we could actually put some money in existing businesses like the housing finance business, which is Religare Housing Development Corp. Broking is doing well and is within its own required space; it is also doing some strategic tie-ups in the market, and our aim is to list the company within two years.

What is the expected timeframe for the qualified institutional placement (QIP)?

I have given this target of presenting their business plans for the newer capital or for the synergistic acquisition of the businesses for the next two to three months’ time. Once all these companies come back with the plan, we will evaluate it and then, of course, based on the assumptive numbers that are required, that will be kept in mind, and then we will go for QIP.

Have you received any interest from investors?

The majority of my investors are very interested in participating more. All of them realize how challenging it has been to create the values. If there was no value created, there wouldn’t be any unlocking of value. During the difficult times, investors participated and believed in us. I’m sure their faith in us remains very strong, and we are very confident that these shareholders believe that value has been created. We are going to present how we are going to unlock value and how we are going to strengthen the group. This process will be over in two to three months’ time.

What would your role be going forward? Will you look at splitting the post of a chairperson and managing director?

Because it is not a promoter-driven company, hence the comfort to the lenders and the regulators would have to come through a very structured way of answerability. That is where I come from, and I am committed to not only getting the company out of the woods, but I am also answerable and responsible for getting the company into a positive trajectory. So, I will continue doing my role as an executive chairperson and lead REL. That is where the interpersonal strength of the management, and the board comes in.

Will you focus on expanding your MSME loan portfolio?

We have been preparing for this for the last 2-3 years. We have our teams divided; one is looking at the collection, and the other is doing all the business, understanding how we can actually create a niche space in micro small and medium enterprises (MSME). We were business-ready already, and we’ve really done that litmus test by actually going ahead and understanding the market. We are going to have a granular book and not repeat the mistakes of the past. Also, we are understanding business through our money before we can reach out to the lenders and try and get more lines extended to us. Within a few months or a year, we will make a platform that will be dependable and trustworthy for all lenders who would like to participate and extend their clients to us.

Is a rebranding exercise in the works?

Now that we have actually had a lot of discussions, we are considering rebranding. We have appointed consultants to look at the rebranding very closely, and we didn’t want to confuse shareholders or regulators by changing the name when we had not finished our one-time settlement. Now we have finished the settlement, and once the whole process is behind us, it is a very serious exercise that we will undertake for rebranding.

Gopika Gopakumar
Gopika Gopakumar has worked for over 15 years as a banking journalist across print and television media. Her expertise lies in breaking big corporate stories and producing news based TV shows. She was part of the 2013 IMF Journalism Fellowship Program where she covered the Annual & Spring meetings of the International Monetary Fund in Washington D.C. She started her career with CNBC-TV18, where she also produced a news feature show called Indianomics and an award winning show on business stories from South India called Up South. She joined Mint in 2016.
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