Religare promoters to sell 22.75% stake to meet banking rules
Quotes

Religare promoters to sell 22.75% stake to meet banking rules

Last Updated: Tuesday, June 18, 2013, 15:52
 
 Comment 0
 
Religare promoters to sell 22.75% stake to meet banking rules
New Delhi: Readying Religare Enterprises for a banking licence, its promoters billionaire brothers Malvinder Mohan Singh and Shivinder Mohan Singh have decided to sell nearly 23 percent stake, currently worth over Rs 1,000 crore, to meet the RBI eligibility norms for new banks.

Religare, a leading non-banking financial services company, is among the major contenders for new banking licences, for which the applicants are required to submit their applications to the Reserve Bank by July 1.

The company today said that its promoters, including Singh brothers, have decided to lower their stake in Religare Enterprises to 49 percent, from 71.75 percent currently, to meet the eligibility criteria for a bank licence.

At the current value, the 22.75 percent stake proposed to be sold would be worth about Rs 1,100 crore. Religare presently commands a market value of close to Rs 4,800 crore.

The stake is likely to be divested through the secondary market and Axis Capital has been appointed as an advisor to find suitable investors willing to buy these shares.

As per the RBI guidelines, the applicant company's promoter group can set up a bank through a Non-Operative Financial Holding Company (NOFHC) with a minimum 51 percent public shareholding.

While most of the applicants are looking to comply with the RBI guidelines, including on the minimum 51 percent public holding after getting an in-principle approval for the licence, the decision taken by Religare promoters is being seen as a proactive approach towards setting up a bank.

Asked about the development, Religare's Group CEO Shachindra Nath told PTI that the company is working diligently with its application process and plans to submit its application to the RBI later this month.

"As per the RBI guidelines on banking licenses, the NOFHC needs to be held by promoters and promoter group only through companies in which they hold not more than 49 percent.

"Given that our promoter group holds 71.75 percent in Religare Enterprises, its board had requested them to consider diluting their shareholding to 49 percent," Nath said, while adding that promoters have agreed to dilute their shareholding proactively, given the long term strategic value of a banking business.

"They (promoters) have also agreed to appoint Axis Capital as their advisor to help them divest this stake.

"At Religare we continue to work diligently for building an integrated financial services business in India," he added.

The group is already present in a host of financial services businesses including insurance, mutual funds, broking and investment banking.

The board of Religare had requested the promoters to dilute their stake after their meeting on May 23.

Accepting the request, the promoters have now informed the company that they would divest up to 22.75 percent stake in the company, considering the strategic importance of a potential bank licence and long-term value creation for all the stakeholders.

PTI




First Published: Tuesday, June 18, 2013, 15:52


Comments


comments powered by Disqus
BRICS Annual Summit 2014
BRICS Annual Summit 2014
Tata Zest Standout Features: In Pics
Tata Zest Standout Features: In Pics
New car launches in July
New car launches in July
Tata Zest first drive review: In pics
Tata Zest first drive review: In pics
Google I/O 2014
Google I/O 2014

Web Wrap
Contact Us : Privacy Policy : Legal Disclaimer
Copyright © Zee Media Corporation Ltd. All rights reserved