Religare Enterprise Limited, India's leading diversified financial services provider including housing finance, loan to SMEs, retail broking, and health insurance. It has been under the corrective plan due to its weak financial health. The company provides a wide range of financial services through its subsidiary Religare Finvest, Religare health insurance, and many more. Religare Enterprises is listed on the NSE and BSE, allowing investors to trade its stocks in NSE and BSE.
However, its subsidiary, Care health insurance, previously known as Religare health insurance, didn't file an Initial Public Offering(IPO) and made its unlisted shares available for retail and institutional investors. In the last few years, Religare Group went through a difficult time and recorded a loss in operational revenue due to high finance costs.
According to CNBC TV18, Religare Finvest completed a one-time settlement of Rs 2,178 crore with lenders to get no dues certificate. Furthermore, the officials of Religare also disclosed that they are working on overcoming the losses. They also assured investors regarding the future growth plan of the company.
Religare Enterprise Net Loss Widened In Last Quarter
Religare Enterprise stated that its net loss widened in the third quarter of the current fiscal year in February. The poor performance of the company also impacted its subsidiaries which recorded negative Profit After Tax in last quarter. Recently, Care health insurance limited unlisted share price dropped in the Pre-IPO market. Due to the constant weak performance of Religare, retail investors recorded a loss in terms of less dividend share.
As per the report of Economic Times, Religare's standalone net loss widened to Rs 11.72 crore in third quarter of current fiscal year. However, the company reported a loss of Rs 1.55 crore in the October to December quarter of the previous fiscal year. Apart from this, Religare also gave a letter of comfort to Comtrade limited( a fully-owned subsidiary) by stating that "the company has booked a financial liability of Rs 1087.26 lakhs till December 31, 2022.”
The net sales of Religare declined by 10.40% by the end of last quarter. As a result, the company's share performance consistently went down, which made Religare group create an extensive plan for overcoming these losses.
Religare’s Planning To Overcome Losses
If we talk about Religare Finvest, which is an NBFC subsidiary of Religare Enterprises Limited, it has been under the Corrective Action Plan (CAP) since January 2018 due to its poor financial condition. It owned around Rs 5,300 crore of lenders, which the State Bank of India leads.
In a recent interview, Rashmi Saluja, Chairperson of Religare Enterprises Limited, revealed that the company had made an agreed payment of Rs 2,178 crore as part of the settlement. She also shared how Religare is currently planning to overcome losses:
The company is taking essential steps like one-time settlement, repayment, etc to overcome the asset-liability mismatch. One of the prior plans of Religare is to extend the One-Time-Settlement (OTS) proposal to its lenders. It executed the OTS agreements on December 31 2022, to all 16 secured lenders for full and final settlement to get no dues certificates. Rashmi Saluja said, "Repayment has given the management a lot of strength to move forward with its fund-raising plans."
Religare is now focused on unblocking the value to create a robust plan for its other subsidiary. In between this, the company also focused on extending the availability of Care Health Insurance Limited unlisted shares for retail and institutional investors. The officials of Religare also said that the company is willing to explore more options, like bringing an IPO of its subsidiary to raise funds.
Another strategy Religare plans to utilise is to ensure all its business follows the RBI and IRDAI rules and regulations. In the press release, Rashmi confirmed from her side that Religare Group is now working towards informing the rating agencies about its latest development and resolving all its legacy issues. She also mentioned that Religare Health insurance did pretty well and continues to widen its customer base in different regions of India.
The major step of the Religare planning is to look for an IPO of Care Health Insurance in the next 2-2.5 years. It is good news for investors eagerly waiting for an IPO. However, the company provides its unlisted shares to retail investors, which involves less risk and wants to diversify its portfolio. That is why it is essential to understand the role of unlisted shares in diversifying the portfolio. Religare plans to raise Rs 600-700 crore in the next few months to facilitate its future business goals.
Religare's Chairperson also clarified that they are creating more strategies to recover from the losses. The revenue of Religare fell from Rs 38 crore to 34 crore year-on-year (YoY). It is also reported that the company is also evaluating new areas for investment like insurance brokerage, asset and wealth management, and more.
The company's current planning clarifies that Religare is ready to get back on track and gives its investors new hope. Right now is the time to invest in its stocks before Religare share prices rise. Retail investors can buy unlisted shares of Religare Health insurance by using a shares brokerage platform like Stockify.
Why Investing In Religare Unlisted Shares Is A Good Choice?
Today, investors are attracted to unlisted shares rapidly due to the less risk involved. These pre-IPO stocks are of the top-performing startups and unicorns unlisted in the stock market. One such company is Care Health Insurance Limited which offers its unlisted shares to retail investors in the grey market. There are various reasons why Religare unlisted shares are a good choice and provide high returns. It is the best way to diversify the portfolio and is considered a sustainable long-term investment.
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