Sebi Rejects Open Offer for Religare Enterprises

New Delhi, Jan 28 (PTI) Capital market regulator Sebi on Tuesday rejected the competing open offer made by the US-based entity Danny Gaekwad Developments & Investments for acquisition of Religare Enterprises Ltd (REL) as it did not meet necessary regulations.

In a communication dated January 28 to REL, the Securities and Exchange Board of India (Sebi) said, "letters submitted by Digvijay Laxmansinh Gaekwad are being returned since the same is not an exemption application in terms of Regulation 11 of SEBI (SAST) Regulations, 2011."

The regulator referred to the email dated January 25, 2025 forwarding a letter dated January 24, 2025 from Digvijay Laxhamsinh Gaekwad, Danny Gaekwad Developments & Investments, Florida, Religare said in a regulatory filing attaching the letter issued by Sebi.

Danny Gaekwad Developments & Investments had proposed to pick up a 26 per cent stake in the financial services firm at a higher price than offered by four entities promoted by the Burman family.

Digvijay Laxmansinh Gaekwad, who claimed to be a globally recognised investor, has offered to pay a 17 per cent higher price of Rs 275 per share of REL as against the open offer price bid of Rs 235 per equity.

Burmans' Religare Enterprises' open offer to acquire an additional 26 per cent stake from the open market commenced on January 27 following the regulatory approvals.

The open offer is for the acquisition of up to 9,00,42,541 fully paid-up equity shares of face value of Rs 10 each, representing 26 per cent of the expanded voting share capital of REL from the public shareholders.

Burman Group entities include Finmart Private Ltd, Puran Associates Private Ltd, VIC Enterprises Private Ltd, and Milky Investment & Trading Company. Following the open offer, Burman's stake in REL would rise to 53.94 per cent.

Last month, the Reserve Bank approved the open offer of the Burman family -- the promoters of FMCG major Dabur -- to acquire an additional 26 per cent stake in NBFC firm Religare Enterprises Ltd (REL).

As of September 30, 2024, Burmans, through its four entities, collectively owns a 25.12 per cent stake in REL.

The Burman family -- a promoter of Dabur India and other entities such as Eveready Industries -- through its entities, in September 2023 announced a Rs 2,116-crore open offer to REL shareholders to acquire up to 26 per cent stake in the company.

Soon after the open offer bid, Burmans complained to capital market regulator Sebi for violation of insider trading rules by the chairperson and appointment of board of her choice.

However, it was contested by REL independent directors, who raised red flags alleging fraud and other breaches by Burman family entities and approached regulators, including markets regulator Sebi, the RBI, and the Insurance Regulatory and Development Authority.