SEBI Returns Danny Gaekwad's Letter Seeking Permit To Bid For Religare Stake

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 the Dabur fame Burman family for a 26% stake in Religare. In addition to this, his offer is for a 55% stake in the company.

In a candid conversation with NDTV Profit on Monday, Gaekwad mentioned, "For any investor, whether in India or abroad, the purpose of investing is to make money." He said that Religare's valuation was “more than reasonably low”, making it a lucrative opportunity.

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

“Mr. Gaekwad had to make the competing offer, if at all, within 15 days from the date of the public statement, which the Burman Group made on Oct. 4, 2023 but he did not do so,” the statement read.

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—is 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.

Shares of Religare on Tuesday closed 3.52% lower at Rs 243.6 apiece on the NSE, as compared to a 0.56% rise in the benchmark Nifty 50. The company's stock has risen by 8.36% over the past 12 months.