Religare Enterprises Ltd — the holding enterprise for Religare group subsidiaries — set up an independent board for supervision and governance of the group and its enterprises, following the exit of Malvinder Singh and Shivinder Singh. Mayur Dwivedi – Head of Strategy, M&A and Investor Relations at Religare Enterprises Ltd, in an interaction with Shaleen Agrawal of TheSpuzz Online, mentioned that Religare Health Insurance, now rebranded as Care Health Insurance, is arranging to quickly launch a public challenge to raise funds. On the other hand, Religare Broking Ltd is arranging to add about 1 lakh new accounts in the existing fiscal. Mayur mentioned that the enterprise is following the ‘Closer to Customer’ technique to have superior outreach to the client. Here are edited excerpts from the interview.
After the exit of Singh Brothers from Religare board, what are the important actions taken beneath new management?
After the exit of ‘Singh Brothers’ from Religare Enterprises board in February 2018 and considerable reduction of their shareholding in the enterprise (3.% by March 2018) by way of invocation/sale of their pledged stakes by lenders, the shareholders (current institutional shareholders and new shareholders) established an Independent Board towards Supervision/Governance of the Group (REL & subsidiaries). The other important actions taken beneath the new board and management consist of management strengthening, investigation of previous wrongdoing and legal action for recovery, Correcting Asset Liability Mismatch in the lending small business, raising capital for development and revival, and closely operating with regulators.
What actions have been taken by Religare Enterprises and Religare Finvest management to revive Religare Finvest?
Religare Enterprises Ltd (REL) and Religare Finvest Ltd (RFL) board and management took a quantity of actions in the final 1.5-2 years towards the revival of RFL. These are enhanced corporate governance, enhanced recovery and recovery efforts for Corporate Linked Book (CLB). The enterprise hired new management and CEO, CRO, CFO, COO, and so forth, all are in location. Religare Enterprises engages with regulators such as Securities and Exchange Board of India (SEBI), Reserve Bank of India (RBI), and National Bank for Agriculture and Rural Development (NABARD), and so forth. Along with the implementation of DRP and Capital structure improvement (new investor or REL), RFL will apply to RBI for exit from CAP.
What does Religare Broking Ltd appear to obtain in FY21?
Religare Broking Ltd has currently turned lucrative in Q4 FY20 and Q1 FY21 and targets double-digit volume /turnover development in FY21 and remains regularly lucrative with rising trends.
How is RBL arranging to improve its digital footprints?
The enterprise is investing heavily in its technologies and item platforms and it plans to add 75k to 100k new accounts in FY21. Company has a mix of Brick & Mortar vs digital model and has an asset-light future technique with bulk of new small business targeted from digital platforms (mobile app and net-primarily based). Religare Broking Ltd plans to continue with existing physical infrastructure (branches/places and so forth) but heavily improve its digital footprints.
After all the legal and economic challenges, how a great deal revenue RFL has repaid to its lenders in FY20?
The misappropriation of funds by erstwhile promoters by way of the corporate linked book of Rs 2,037 crore (CLB matter) and Lakshmi Vilas Bank misappropriating RFL fixed deposits of Rs 791 crore (LVB case) and other Non-Core Asset/Investment, contributed towards RBI placing RFL beneath Corrective Action Plan (CAP) in January 2018 and also serious Asset Liability Mismatch (ALM) in its books. Despite all the economic, small business and legal challenges, like getting beneath RBI CAP which restricted the firm from performing new small business, RFL has repaid far more than Rs 6,450 crore to its lenders because January 2018 and Rs 1517 crores in FY20 itself.
How is Religare group arranging to simplify the corporate structure?
Company is arranging a simplification of the corporate structure by merging non-operating subsidiaries which will support lessen price. REL had entered into a Share Purchase Agreement (SPA) in October 2019 with TCG Advisory Services Private Limited (TCG) for one hundred% sale of RFL and RHDFCL, as element of its Debt Restructuring work. However, in March 2020, RBI did not accede to TCG acquiring RFL. RFL is in the course of action of restructuring of debt and enhancing its capital structure.
What is the capital predicament of Religare Enterprises now?
In FY20, REL raised Rs 161.5 crore by way of conversion of warrants. Its insurance coverage subsidiary, Care Health Insurance Company raised Rs 58.5 crore by means of preferential allotment/rights challenge. In June 2020, Kedaara Capital invested Rs 567 crore in Care Health. The Rs 300 crore was the main capital infusion in Care Health and Rs 200 crore worth of secondary shares had been sold by REL. REL now holds 71.8 per cent in Care Health. REL invested some of this capital in other subsidiaries. The enterprise settled a legal dispute with Axis Bank, in regard to a credit facility of its subsidiary, which was restricting it from sale of assets/ equity stakes, due to unfavourable interim order by the court. REL paid off all external debt obligations and became external debt-totally free. The enterprise amicably settled the dispute and claim (about Rs 650 crore) filed in Delhi High Court by PE investors of its subsidiary RFL. REL purchased back PE investors 14.36% stake in RFL against consideration of Rs 47 crore.