Religare Enterprises shares in focus today; here is what happened during the weekend

The Burman family raised its stake in Religare to nearly 25% in September 2023, triggering an open offer to buy more shares.

Through the open offer process, which starts today (January 27), the Burman family plans to buy around 26% more of Religare to bolster their presence in the country's rapidly growing financial services sector, but Religare's independent directors flagged this week that the offer price of ₹235 per share was too low.

In a stock exchange disclosure late on Friday, Religare shared a letter from US entrepreneur Digvijay "Danny" Gaekwad's firm requesting permission from the capital market regulator SEBI to make an open offer of ₹275 per share for the company, a 17% premium to the current offer.

The open offer is for the acquisition of up to 9,00,42,541 fully paid-up equity shares of face value of ₹10 each, representing 26% of the expanded voting share capital of REL from the public shareholders.

Following the open offer, Burman's stake in REL would rise to 53.94%, while Digvijay Laxmansinh Gaekwad proposes to pick a 55% stake in the company.

Last month, the Reserve Bank approved the open offer of the Burman family—the promoters of FMCG major Dabur—to acquire an additional 26% stake in Religare Enterprises Ltd (REL).

The Burman family—a promoter of Dabur India and other entities such as Eveready Industries—through its entities, in September 2023, announced a ₹2,116-crore open offer to REL shareholders to acquire up to a 26% stake in the company.

Soon after the open offer bid, the Burmans complained to capital market regulator SEBI for violation of insider trading rules by the chairperson and appointment of a board of her choice.

However, it was contested by REL independent directors, who raised red flags alleging fraud and other breaches by Burman family entities and approached regulators, including markets regulator SEBI, the RBI, and the Insurance Regulatory and Development Authority.

In India, an open offer is triggered when the acquirer buys a 25% or higher stake. The acquiring company is required to make an open offer for at least 26% additional shares, at a price not below the average price of the last 26 weeks. This provides an exit route for the minority shareholders in the event of a new management taking over.