Danny Gaekwad Development Pleads SEBI’s Exemption For Religare Takeover

Danny Gaekwad Development pleads SEBI’s exemption for Religare takeover

Strap – The request was made days after the capital market regulator rejected the company’s competing open

US-based entity Danny Gaekwad Developments & Investments has urged the Securities and Exchange Board of India (SEBI) to reconsider its competing open offer for Religare Enterprises Ltd related to Dabur’s Burmans’ open offer.

Religare posted Danny Gaekwad’s letter to the SEBI Chairperson, requesting exemption from enforcement of Section 20 of the Substantial Acquisition of Shares and Takeovers (SAST) Regulations.

It also urged the capital market regulator for directions to keep the Burmans' open offer in abeyance so that the public shareholders could tender their shares in the Burmans' offer and Religare’s proposed competing offer.

Moreover, the company requested the Reserve Bank of India (RBI) to establish an escrow account with a scheduled commercial bank for the competing open offer wherein Rs.60 crore would be deposited.

The RBI Governor was requested to provide an unconditional, irrevocable and on-demand bank guarantee for the competing offer from a scheduled commercial bank for Rs.540 crore.

Meanwhile, Digvijay Laxmansinh Gaekwad, a globally recognized investor, has offered to pay a 17 percent higher price of Rs.275 per share of Religare as opposed to the offer price of Rs.235 per equity.

Following the regulatory approvals, Religare’s offer to acquire an additional 26 percent stake from the open market commenced recently. It was for the acquisition of 9,00,42,541 fully paid-up equity shares of Rs.10 each.

The Burmans’ stake in Religare would thus rise to 53.94 percent, while Digvijay proposes to pick a 55 percent stake in the company.

In December last, the RBI approved the open offer of the Burman family, the promoters of FMCG major Dabur India and entities including Eveready Industries, to acquire an additional 26 percent stake in NBFC firm Religare.

As of 30 September 2024, Burmans, through its four entities – Finmart, Puran Associates, VIC Enterprises and Milky Investment & Trading, owned a 25.12 percent stake in Religare.

In September 2023, the Burmans announced a Rs.2,116-crore open offer to Religare shareholders to acquire up to 26 percent stake in the company.

However, soon after, they complained to SEBI about the violation of insider trading rules by the chairperson and the appointment of the Board.

The claim was challenged by Religare’s independent directors, who raised red flags alleging fraud and other breaches by the Burman family entities. They approached the regulators, including SEBI, the RBI, and the Insurance Regulatory and Development Authority.