PE firm Kedaara Capital invests Rs567.3 crore in Religare Health Insurance
The transaction comprises ₹300 crore worth primary capital directly infused by Kedaara Capital into the health insurerKedaara’s arm, Trishikhar Ventures LLP bought 6.39% stake in the insurer for Rs267.31 crore
PremiumMUMBAI: Homegrown private equity firm, Kedaara Capital Fund II LLP, completed the investment of Rs567.31 crore, including primary capital infusion and purchase of 6.39% stake, in Religare Health Insurance Co Ltd on 2 June, the insurer's parent Religare Enterprises Ltd said in a stock exchange filing on Wednesday.
"The capital infusion will help us to continue our investments in making Religare Health Insurance a future-enabled organisation, committed to ensure the best customer experience. It is a matter of pride that Religare has attracted a marquee investor even in such tough economic times," said Rashmi Saluja, executive chairperson, Religare Enterprises, and non-executive chairperson of Religare Health Insurance.
The transaction comprises ₹300 crore worth primary capital directly infused by Kedaara Capital into the health insurer. The capital includes ₹100 crore fresh capital, in addition to its initial commitment on 7 February of infusing ₹200 crore in the insurer.
Kedaara’s subsidiary, Trishikhar Ventures LLP bought 6.39% stake in the insurer for Rs267.31 crore, trimming Religare Enterprises’ shareholding in the company to 72.02%. The transaction got approval from the Insurance Regulatory and Development Authority of India (IRDAI) on 16 April.
The development comes as Religare, which has been stung by controversies surrounding its erstwhile promoters, Malvinder and Shivinder Singh, has been making efforts to raise capital to repay the outstanding loans of Religare Enterprises.
With the latest divestment of stake, the firm has used ₹153 crore toward the payment of the full and final settlement consideration to Axis Bank Ltd, making it external debt-free.
"While there were many headwinds and legacy issues, we have successfully resolved most of them and others are on the path to resolution. Among them, the Axis settlement stands out as an important milestone as it has made Religare Enterprises external debt-free," said Nitin Aggarwal, chief financial officer (CFO) of Religare Enterprises.
"REL has been on a course correction mode for the last two years and we are steering the ship to ensure that all businesses perform to their full potential and accelerate growth", he added.
Religare group's health insurance business has been growing at a compound annual growth rate (CAGR) of 50% in the last three years and the insurer may continue growing at this pace.
In March, the Reserve Bank of India (RBI) stopped the sale of Religare Enterprises’ non-banking financial arm, Religare Finvest Ltd (RFL), to TCG Advisory Pvt Ltd, part of Purnendu Chatterjee’s The Chatterjee Group (TCG), and asked the company to submit a revised proposal for the NBFC’s revival. The sale of Religare Finvest and its housing finance subsidiary Religare Housing Finance Development Corp Ltd would have fetched Religare group around ₹330 crore.
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