Months after the Burman family took control of Religare Enterprises Ltd., the board of the financial services firm has approved a fundraise via preferential allotment that will allow the promoters to raise their stake.
An approval has been issued to raise Rs 1,500 crore via the issuance of 6.38 crore warrants, according to an exchange filing on Friday. The warrants will be issued Rs 235, a discount of 13% from the current market price of Rs 270.84. One warrant will be convertible into one equity share within 18 months.
The company will raise Rs 1,500 crore from a total of 11 investors. Out of this, Rs 750 crore will be raised from entities linked to the Burman family, including Puran Associates, VIC Enterprises, M B Finmart, and Milky Investment & Trading Co.
Additionally, JM Financial Credit, Ashish Dhawan and others will infuse the remaining Rs 750 crore.
The funds raised through private placement will be used to fuel business expansion and drive new strategic initiatives.
Following the fund infusion, the promoter holding in Religare will increase to approximately 29.6% from 25.7%.
The Burman family, which controls fast-moving consumer goods giant Dabur India Ltd., took control of Religare in February this year following a prolonged tussle that involved the financial services firm's ousted chairperson Rashmi Saluja and the US-based investor Danny Gaekwad.
The Burman Group emerged as the front-runner to acquire Religare after initially seeking to increase its stake in September 2023. The family had made an open offer to buy an additional 26% stake in Religare at Rs 235 per share, amounting to Rs 2,116 crore. This move was set to increase their stake in the company to 53.94%.
However, the acquisition faced a last-minute challenge when Danny Gaekwad made a competing offer of Rs 275 per share for a 26% stake, which was 17% higher than the Burman family's offer. Gaekwad's offer was ultimately rejected due to regulatory approval issues, clearing the way for the Burman Group to take control.
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