As of the timestamp 1:40 pm, Religare Enterprises experienced a notable decline of 5 percent in the value of its shares, which were trading at Rs 257.80 each on the National Stock Exchange (NSE). This decline in share value came in response to a significant development that unfolded on Monday.
On that day, the Burman family revealed their strategic intention to attain a controlling stake in Religare Enterprises. Their plan entails acquiring approximately 26 percent of the company's equity, for a sum totaling Rs 2,116 crore. This substantial investment reflects their aspiration to secure a dominant position within the financial services sector, enabling them to effectively compete and expand in an industry characterized by rapid growth.
It is noteworthy that Religare Enterprises operates in a market where it faces competition from other financial service providers, many of which are backed by affluent Indian families. One such example is Jio Financial Services, which emerged following a demerger from Mukesh Ambani's Reliance Industries Limited.
The Burman family, renowned for their association with the consumer goods conglomerate Dabur India, currently holds the largest individual ownership stake in Religare Enterprises, approximately constituting 21 percent of the company's shares.
In pursuit of their strategic objectives, the Burmans have outlined a plan to acquire a substantial 90 million shares of Religare at a price of Rs 235 per share, as detailed in the official offer document. This acquisition price signifies a considerable discount when compared to Religare's previous closing stock price, which stood at Rs 271.55.
During the same trading day, Religare's shares experienced a significant decline of up to 6.9 percent on the stock market, underscoring the market's reaction to this major development.
Anand Burman, the Chairman Emeritus of Dabur India, articulated the family's vision behind this strategic move, stating, "The proposed transaction is in line with our vision to create a leading financial services platform that encompasses lending, broking, and health insurance services."
Crucially, it should be noted that as outlined in the offer document, the Burman family will possess the authority to appoint directors to Religare's board and exert influence over changes in the company's management structure.
Currently, Religare Enterprises offers a diverse range of services, including providing loans to small and mid-sized businesses, offering health insurance coverage, and facilitating broking services. These services operate in an environment of rapid growth in India, mirroring the nation's expanding economy. This development signals the Burman family's strategic thrust to play a pivotal role in this dynamic and burgeoning sector.
