Financial services firm Religare this week raised Rs 570 crore via a preferential issue with the Burman Family Holdings being one of its key investors. The Burman family, the control shareholders of the Dabur Group, has invested in Religare via various entities, now has a stake of over 14 percent in the company.
Mohit Burman, the vice-chairman of Dabur India Ltd, spoke to CNBC-TV18 on June 10 and revealed why they remain invested in Religare and what is their outlook going forward.
What makes you confident about investing in Religare?
We have been investors in the company since 2018 when a new board and set of investors came in to stabilise the company post the erstwhile promoters and directors leaving due to misappropriation charges.
Do you have plans to take over as promoter or run the company?
No, we are financial investors and in a sense, we are large minority investors.
How long will this fundraiser help the company operate?
We hope this suffices for at least a couple of years and the various companies within the group (HFC, broking, Insurance, NBFC) can grow themselves now that capital won’t be a challenge.
The preferential issue is at a steep discount to today's closing price. What do you think about the future prospects of the firm?
The preferential issue is as per the preferential pricing formula and we believe that Religare has a better tomorrow.
Your shareholding has now increased to over 14 percent. Will you take your stake up to 20 percent or 25 percent, like in Eveready?
We are the largest shareholder in each of these entities but we remain a financial investor, and both companies are different so I can’t tell you whether we will increase our stake or not but the option is always available to us as investors. This is a different situation from Eveready where there is no identifiable promoter.
Would the Burman group be willing to take control of Religare over time? Considering they have other financial sector assets, would you take control and convert this into your financial services platform strategically?
As I said, we are financial investors and all we want is for the company to be run in a professional manner which we believe the new management is trying to do, and this is accretive to all shareholders, big and small.
How do you intend to add value to Religare’s business?
I believe we have provided capital to the company twice in the last three years and that has brought stability to the company and going forward we would like to be long-term shareholders.
Will you appoint a member on the board considering you are the single largest shareholder?
No, not as yet.
Could you share details on the status of the bank restricting plan for Religare Finvest?
This question is best aimed at the management. I believe it’s a work in progress.
How much do you hold in Religare at present and do you intend to take over the board of the company?
Our ownership before the preferential issue is 11 percent post it should be around 14.5 percent if the issue passes muster.
Do you have any plans to sell Religare Broking?
This is a question for the management, though we believe that Religare has a host of businesses, and all these businesses have a good opportunity to scale up if nurtured well.
Could you share with us the timeline of the listing plan for Care Insurance?
Again something I can’t comment on.
What is the gross written premium (GWP) of Care Health Insurance right now and how much do you see it grow in the coming two years?
Care’s management or Religare’s management wil be able to answer this better.
What do you think is the impact of COVID-19 reared claims on Care Health Insurance?
Again this is for the management to answer.
(Edited by : Kanishka, Abhishek)
First Published: IST