Religare Minority Shareholder Approaches Delhi HC Against Burman Family's Takeover Plans

Sapna Govind Rao, a minority shareholder with 500 shares in Religare Enterprises Ltd. has moved the Delhi High Court to stop the Dabur fame Burman family's acquisition of the company's stake.

Rao has instead supported the counteroffer given by Danny Gaekwad, which SEBI returned on Tuesday.

As per the information available on the Delhi High Court website, Rao's petition mentioned that the conditional approval given to the Burman Family by the Reserve Bank of India is not in consonance with the acquisition and takeover regulations of the Securities and Exchange Board of India.

The case was last heard on Jan. 21 and the next hearing is supposed to take place on Feb. 18, before the single judge bench of Justice Mohan Jain.

However, in a related development, the Securities and Exchange Board of India on Tuesday returned US-based investor Danny Gaekwad's letter, which sought permission to make a competing open offer for equity shares of Religare Enterprises Ltd. The regulator found that the letter was not an exemption under the security law regulations.

Gaekwad’s offer spoke of a 17% premium over the Rs 235-a-share offer made by Burman family for a 26% stake in Religare. In addition to this, his offer is for a 55% stake in the company.

However, when Gaekwad’s offer surfaced, the Burman family had also released a media statement in its response. The statement mentioned that his offer was not a formal one, as he only sought permission from SEBI to be able to do so. The Burmans further mentioned that Gaekwad was already late in making an offer.

Before the offer by Gaekwad became public, the independent directors of Religare Enterprises, on Jan. 23, flagged concerns over the open offer for the company's stake by the Burman family. The ongoing open offer of Rs 235 per share by M.B. Finmart Pvt., Puran Associates Ltd. and VIC Enterprises Ltd.—entities owned by the Burman family—was less than the closing market price of Rs 271 on Sept. 22, 2023, a day before the announcement of the offer.

Furthermore, the directors also mentioned that the RBI approvals dated Dec. 9, 2024, given to Burmans regarding their open offer were conditional in nature and mandated the Burman family entities to consolidate the non-banking financial companies within the Burman and Religare groups by March 31, 2026.

A detailed consolidation plan, supported by board resolutions, had to be submitted to the RBI within 90 days of the letter.

The directors submitted that non-compliance with the conditions set by the RBI could lead to dire regulatory consequences for the Burman family entities as well.