Religare's Independent Directors Flag Pricing, Regulatory Concerns About Burmans' Open Offer
The independent directors of Religare Enterprises Ltd. have 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 Burman family — is less than the closing market price of Rs 271 on Sept. 22, 2023, a day before the announcement of the offer.
Religare shares closed at Rs 253 on NSE on Jan. 22, 2025, which places the offer price at a discount of 7%, according to an exchange filing. In fact, the 60-day volume weighted average price of the shares before Jan. 21, 2025 stood at Rs 280. This marks a discount of 16%, from the offer price.
Hence, the independent directors have asked the shareholders to look at the pricing details before deciding on anything. But the concerns extend beyond price.
The RBI, in its conditional approval dated Dec. 9, 2024, 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, must be submitted to the RBI within 90 days of the letter.
The specific details of this consolidation condition were not disclosed in the Letter of Offer issued by JM Financial Ltd., the manager of the open offer. The filing further mentions that non compliance with the conditions set by the RBI could lead to dire regulator consequences on the Burman family entities as well.
Therefore, the independent directors have asked the shareholder to make a decision, keeping in mind the pricing issues as well as the regulatory challenges.
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