Religare Enterprises Shares Surge 9% as Burmans Assume Control: Key Developments
Shares of Religare Enterprises Ltd (REL) soared nearly 9% on Friday, following the announcement that the Burman family has successfully acquired a controlling stake in the company after completing the open offer. The acquisition, which marks a significant shift in the company’s ownership, was disclosed through an official stock exchange filing.
With this latest development, the Burmans now hold 83,201,819 equity shares in Religare Enterprises, representing a 25.16% stake in the company. The takeover has sparked renewed investor interest, driving REL’s stock price up by 8.52% to a high of ₹242 on the Bombay Stock Exchange (BSE).
Burman Family’s Strategic Investment and Future Plans
The Burman family, widely known for their ownership of Dabur India, has signaled its intent to further increase its stake in Religare Enterprises. According to reports from The Economic Times (ET), the Burmans are expected to inject ₹2,000 crore into the company by subscribing to preferential shares. If executed, this move would boost their overall stake in REL to over 50%, making them the clear majority owners.
In addition to increasing their financial commitment, the new promoters are considering a strategic rebranding of Religare Enterprises and its subsidiaries. This transformation could include a renaming of the company to align with the Burmans’ broader strategic vision and business interests.
Recent Acquisitions and Share Transfers
The acquisition process has been executed in a series of transactions over the past few weeks:
- On February 17, 2024, the Burmans purchased 231,025 equity shares (0.07% of the total paid-up share capital).
- On January 31, 2024, they acquired 13,200,000 equity shares (3.99% of the outstanding paid-up share capital) through purchase orders. These shares were officially transferred from an escrow demat account to the Burmans’ account on February 18, 2024.
- The completion of these transactions formally established the Burmans as the new promoters of Religare Enterprises.
In a regulatory filing, Religare Enterprises confirmed the transition, stating:
“Consequent to the change of control, the acquirers are the promoters of the target company.”
Details of the Open Offer and SEBI’s Involvement
The Burman family’s acquisition was conducted through an open offer that aimed to purchase up to 9,00,42,541 equity shares, or 26% of Religare Enterprises, from public shareholders. This offer was made via multiple Burman-owned entities, including:
- M.B. Finmart Private Limited (MFPL)
- Puran Associates Private Limited (PAPL)
- VIC Enterprises Private Limited (VIC)
- Milky Investment & Trading Company (MITC)
Prior to this open offer, the Burman group already held a 21.54% stake in Religare Enterprises. Their plan, announced on September 25, 2023, was to purchase an additional 5.27% stake through market transactions, at a maximum price of ₹235 per share.
Failed Competing Bid by Danny Gaekwad
The Burman family’s takeover was not without challenges. In an unexpected twist, Florida-based businessman Digvijay Laxhamsinh Gaekwad (founder of Danny Gaekwad Developments & Investments) attempted to make a competing offer for a 55% stake in Religare Enterprises at a higher price of ₹275 per share.
Gaekwad’s request, however, was rejected by SEBI (Securities and Exchange Board of India) on the grounds that he failed to demonstrate the financial capability to fulfill his acquisition obligations under the SAST Regulations, 2011. This effectively cleared the way for the Burmans to complete their takeover without further competitive bids.
Market Reaction and Stock Performance
Following the confirmation of the Burmans’ control, REL shares witnessed a strong rally on the stock market. On Friday, the stock surged 8.52%, reaching a 52-week high of ₹242 on the BSE.
Investor sentiment remains optimistic, driven by:
- The Burman family’s financial strength and strategic leadership.
- The proposed ₹2,000 crore capital infusion, which is expected to strengthen Religare’s financial position.
- Speculation surrounding a potential rebranding and business expansion.
Analysts believe that Burman-led management could bring greater stability and long-term growth to Religare Enterprises, a company that has undergone several corporate challenges over the years.
Future Outlook: What’s Next for Religare Enterprises?
With the Burmans now in control, Religare Enterprises is poised for major transformations in the coming months. The new promoters are expected to:
- Increase Capital Reserves – The ₹2,000 crore fund infusion will likely be used to strengthen Religare’s financials, support business expansion, and enhance operational efficiency.
- Rebrand the Company – The Burmans are exploring rebranding initiatives, which may include renaming Religare Enterprises and its subsidiaries.
- Optimize Business Strategy – Given their extensive experience in finance and healthcare, the Burmans may introduce new business verticals or restructuring efforts to align the company’s growth with emerging market trends.
- Enhance Governance & Compliance – With Religare previously facing governance-related challenges, the Burmans’ entry is expected to improve transparency and regulatory compliance.
Conclusion
The successful takeover of Religare Enterprises by the Burman family marks a new chapter in the company’s history. The ongoing share acquisition, capital infusion plans, and strategic rebranding efforts indicate that the new promoters are committed to long-term growth and business stability.
While short-term stock volatility may persist due to market speculation, the Burman-led transition is widely seen as a positive development for investors and stakeholders. With further management changes, financial restructuring, and expansion strategies on the horizon, the coming months will be crucial in determining Religare’s future trajectory under its new leadership.
