Religare Enterprises Limited
Press Release: 2nd October, 2019
Religare Enterprises Limited (REL), in a late night press release to Stock Exchanges informed of two significant steps towards Revival of the Religare Group. The company informed about the signing of Share Purchase Agreement for sale of its NBFC business, Religare Finvest Ltd to TCG Advisory Services Ltd and also about settlement of dispute with Axis Bank, which was restraining the capital raise plans in its various group companies. Religare Enterprises Ltd (REL), the listed financial services holding company, erstwhile promoted by Singh Brothers (Malvinder & Shivinder), was mired under controversies in the past due to financial mismanagement by the promoters. Currently the promoter stake has reduced to around 1% in the company and REL has applied for declassifying them as promoters. The company is now majority owned by a set of institutional investors & family offices, governed by an independent board and a new management is trying to turnaround the fortunes of the group.
Finally, the efforts of the new management to revive business performance and take prudent financial decisions seem to be paying off. The company's announcements of sale of its NBFC business - Religare Finvest Limited to TCG Advisory Services, is definitively seen as a positive development by all stakeholders. Religare Finvest. which is attempting a business revival along with restructuring of its debt, requires sustained capital commitments. In a statement, Mr Nitin Agarwal, Group CFO, Religare Enterprises Limited (REL) and CEO, Religare Broking Limited said, "The divestment of our NBFC business will help conserve capital for the company and allow us to focus on other businesses of the group. It's a win-win deal for REL and TCG, who can help grow the NBFC business with a long term capital commitment. "
Religare Finvest itself is being revived by a new management team lead by Mr. Sanjay Palve, MD & CEO of Religare Finvest Ltd.(RFL) and Religare Housing Development Finance Company Ltd (RHDFCL), its housing finance subsidiary. Sanjay is a Banking industry veteran and he and his team is leading the complete turnaround of the NBFC business. In last one year, the new team has done the cleanup of books, improved Corporate Governance and strengthened the Internal Processes/ Risk Management. The company which was put under RBI’s Corrective Action Plan (CAP), restraining it from further lending activity, is in advanced stages of restructuring its debt and improve capital ratios to come out of CAP restriction from RBI. Unlike many of its peers, it is able to keep its account standard with Banks despite having asset liability mismatch and RBI Cap restrains. In a statement Sanjay mentioned "We are very confident that the revival of Religare Finvest will set an example in the NBFC sector. With TCG coming in as a promoter shareholder, we have strong backing of capital and long-term commitment towards business. Our lenders are also positive to complete the restructuring of debt to ensure sustainable growth of company and their interest" . He further added that “Religare's turnaround could provide much needed ray of hope to financial services sector in a time when everyday negative news flow. “
The company has started forming new business ideas and plans with digitization and new products /segments launch as key pillars of growth. Mayur Dwivedi, Head of Strategy, Religare, stated, " Currently, we have strong foundations and infrastructure as a conventional NBFC lending platform but the future belongs to a combination of conventional and digital delivery, we have already started working towards that, along with the financial turnaround of the Group".
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About Religare Enterprises Limited:
Religare Enterprises Limited is a diversified financial services group offering SME loans, affordable housing loans, health insurance services and retail broking services through its subsidiaries and operating entities and is listed on the BSE and NSE. As a group, Religare caters to diverse segments of the market from mass retail to affluent SMEs to mid-size corporates. Its subsidiaries service over 1.1 million clients from over 1,275 locations having presence in more than 400 cities.
For more information, visit www.religare.com