Leading provider of varied financial services in India, Religare Enterprise Limited offers housing financing, small business loans, retail broking, and health insurance. Due to its dire financial situation, a correction strategy has been in place. The corrective plan has been in place because of its poor financial standing. Through its subsidiaries Religare Finvest, Religare health insurance, and many others, the company offers a broad range of financial services. Due to Religare Enterprises’ listing on the NSE and BSE, investors can trade its equities there.
However, Care health insurance, formerly Religare Health Insurance, a subsidiary of that company, did not submit an Initial Public Offering (IPO) and made its unlisted Religare share accessible to retail and institutional investors. Due to high finance costs, Religare Group experienced a difficult period in the last several years and registered a loss in operational revenue.
Religare Finvest reportedly paid lenders a one-time payment of Rs 2,178 crore to obtain a certificate of no outstanding debts, according to CNBC TV18. The Religare officials also said that they are attempting to make up for the losses. Investors were also given assurances regarding the company’s long-term growth strategy.
Why Religare Health Care Witnessed Loss?
The lawsuit filed by former Religare CEO Sunil Godhwani and former Ranbaxy promoter Shivinder Singh against his brother Malvinder and Fortis Healthcare founder Shivinder Singh offers an intriguing look at the circumstances under which Shivinder believes his family lost control of Religare Enterprises and Fortis Healthcare, two of India’s largest (Non-Banking Financial Company) NBFCs.
The Shivinder suit claims that Malvinder, who had lost control of Religare Enterprises, used his authority as chairman to direct Religare Finvest to deposit Rs 750 crore in a fixed deposit with Laxmi Vilas Bank on November 19, 2016. RHC Holding and its subsidiary Ramchem Private Limited received loans totaling Rs. 750 crores in exchange for this FD. As a result, Religare Finvest’s capital was practically depleted while the loans taken out by RHC and its subsidiary were still unpaid.
According to Shivinder, the family lost control of Fortis and Religare as a result of their failure to pay back these loans. When RHC and its subsidiaries failed to make their payments to First Gulf Bank in July 2017, the Religare shares were first significantly invoked. Indiabulls called for the second set of shares the very following month, in August. The third lot was used on August 31, 2017, following a Supreme Court judgement to maintain the status quo with regard to the Fortis transaction. The fourth lot was then activated immediately following the SC order, which caused RHC to suffer an even more significant value loss.
How Is Religare Healthcare Planning To Cover Losses
Given its dire financial situation, Religare Finvest, an NBFC subsidiary of Religare Enterprises Limited, has been on the Corrective Action Plan (CAP) since January 2018. The State Bank of India is the largest of the lenders it owns, totaling about Rs 5,300 crore.
Rashmi Saluja, Chairperson of Religare Enterprises Limited, disclosed that the business made the agreed-upon payment of Rs 2,178 crore as part of the settlement in a recent interview. She also disclosed how Religare intends to deal with losses:
- The business is making crucial moves to address the asset-liability mismatch, including one-time payments, repayment, etc. Religare has previously intended to offer its lenders the One-Time-Settlement (OTS) option. On December 31, 2022, it executed the OTS agreements with each of the 16 secured lenders in order to get certificates of no-dues status. In the words of Rashmi Saluja, “Repayment has given the management a lot of courage to move ahead with its fund-raising plans.”
- Currently, Religare is concentrating on unlocking the value to develop a solid plan for its other subsidiaries. In between, the company concentrated on increasing institutional and individual investors’ access to Care Health Insurance Limited unlisted Religare shares. Religare officials also stated that the business is open to exploring additional possibilities, such as bringing an IPO of a subsidiary to acquire money.
- Making sure all of its operations adhere to the norms and regulations set forth by the RBI and IRDAI is another tactic Religare intends to use. Rashmi stated in the press release that Religare Group is now working to update the rating agencies on its most recent development and addressing all of its legacy issues. She further added that Religare Health Insurance performed admirably and kept expanding its clientele in various parts of India.
- Searching for an IPO of Care Health Insurance in the ensuing two to five years is a key component of Religare’s program. For investors who are eagerly awaiting an IPO, it is wonderful news. To diversify its portfolio and offer less risk to individual investors, the corporation offers its unlisted Religare share. Understanding the function of unlisted shares in portfolio diversification is crucial for this reason. Religare expects to raise Rs 600-700 crore in the upcoming months in order to support its long-term business objectives.
- The Chairperson of Religare further highlighted that more plans are being developed to make up for the losses. Religare’s revenue decreased year over year (YoY), from Rs 38 crore to Rs 34 crore. The corporation is reportedly also assessing new investment opportunities, including asset and wealth management, insurance broking, and more.
Religare is prepared to go back on track, and the company’s present agenda makes that clear. This provides investors fresh hope. Before the price of Religare shares increases, now is the ideal moment to invest in its stocks. Using a stock brokerage site like Stockify, retail investors can purchase unlisted shares of the Religare Health insurance company.
Why Is It A Good Idea To Invest In Religare Unlisted Shares?
Investors are more drawn to unlisted Religare shares today since there is less risk involved. The best-performing businesses and unicorns that aren’t publicly traded are represented by these pre-IPO equities. Care Health Insurance Limited is one such business that makes its unlisted shares available to individual investors on the black market. Religare unlisted shares are a wise investment and offer excellent profits for a number of reasons. It is regarded as the most effective method of long-term portfolio diversification.
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