Burmans become Religare Enterprises promoters: Key things to know

After a legal tustle that lasted 18-odd months, the Burman family gained control of Religare Enterprises, becoming promoters of the financial services company. According to a regulatory filing, the Burmans acquired an additional 25.16 per cent stake in Religare Enterprises through four companies: MG Finmart, Puran Associates,VIC Enterprises, and Milky Investment & Trading Co.

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Here are key things to know about the development: 

• A spokesperson said that the group will work with Religare Enterprises’ leadership and board to reinforce its strategic direction and enhance long-term value creation. 
• The immediate priority is to “instil stability, strengthen governance, and drive sustainable growth at the company”, with “governance, trust, and integrity” remaining at “the core of our vision as we steer REL towards a future defined by resilience and stakeholder value maximisation”, said the spokesperson. 

Burmans’ open offer 

• In September 2023, the Burman family reached a 25 per cent stake in the company. 
• As per rules, owning a 25 per cent stake in a listed company in India makes it mandatory for the acquirer to make an open offer to purchase an additional 26 per cent of the voting shares. 
• Fifty one per cent ownership in a company is considered a controlling stake, which gives the acquirer the power to make decisions over the company’s operations and management.
• The Burman family’s open offer to acquire the company was opposed by the company’s senior management, led by Chairperson Rashmi Saluja, citing undervaluation. 
• The matter went to court, after regulators RBI and SEBI approved the offer in December. 
• Finally, the Burmans launched the offer in late January, which also prompted the existing management to come up with a counter offer, which did not materialise. 

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