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2 min read | Updated on June 20, 2024, 16:21 IST
SUMMARY
The Burman Group, which owns India’s one of the largest consumer goods companies Dabur, increased its stake in Religare Enterprises to about 25% in September 2023. Subsequently, the Burmans initiated the open offer to buy more shares from public shareholders.
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Religare Enterprises directed by Sebi to apply for Burman family open offer, shares gain over 4%
Reports suggested that Sebi, in an interim order on June 19, directed the non-banking financial firm to apply for approval from Sebi, the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority of India (IRDAI).
Sebi said that shareholders’ rights cannot be curtailed by the existing management of the target company in such cases where the existing management is hostile to the acquirers and has a conflict of interest.
This is seen as a blow to Religare Enterprises’ attempts to block the Burman group's open offer to buy a larger stake in the company.
The Burman Group, which owns India’s largest consumer goods company, Dabur, increased its stake in Religare Enterprises to about 25% in September 2023. Subsequently, the Burmans initiated an open offer to buy more shares from public shareholders.
However, according to media reports, the Burman Group had alleged that the Board of Religare Enterprises and its Chairperson Rashmi Saluja were trying to block their open offer. The reports suggested that Religare had complained that the Burmans were not ‘fit and proper’ for the acquisition of the open offer was "riddled with irregularities and statutory violations”.
However, Sebi has reportedly said that Religare has failed to submit any evidence or documents supporting its allegations to be true.
The Burmans approached the Sebi due to the company's lack of cooperation.
India’s financial services sector is growing rapidly. Reports suggest that the Burmans want to buy a 26% more stake in Religare to strengthen their presence in the sector.
Religare Enterprises share price rose nearly 4% in morning trade on NSE on Thursday, June 20 in a lacklustre market.
The stock ended over 2% lower in the previous session. Year-to-date, Religare share price has increased a little over 9%.
Shares of Religare Enterprises closed 4.00% higher at ₹233.6 apiece on the NSE.
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