Companies
Religare to be run by independent board: Mohit Burman
Summary
- Burman said his family, which has made various financial investments, will set up an independent board and management for Religare after completing the acquisition.
Mumbai/ New Delhi: Religare Enterprises is now more than a financial investment for the Burman family, Dabur India chairman Mohit Burman said, after its proposal to take control of the insurance and financial services firm. In August, the family had categorised its stake in Religare as a financial investment.
In an email interview, Burman said his family, which has made various financial investments, will set up an independent board and management for Religare after completing the acquisition.
“This is more than a financial investment. We have made an offer for management control, and we value the platform. We plan to grow the business and increase wealth for all stakeholders," Burman said.
The Burmans also own shares in other financial services and insurance firms like Aviva Life Insurance, DMI Finance, and Universal Sompo General Insurance, but have minority stakes in these businesses.
In September 2022, UK-based insurance and wealth company Aviva Plc. had increased its stake in Aviva Life Insurance from 49% to 74%, while Burmans reduced their stake to 26%. Universal Sompo General Insurance is a joint venture comprising Indian Bank, Indian Overseas Bank, Karnataka Bank, Dabur Investment Corp. and Sompo Japan Insurance Inc. The family owns minority stakes in the two firms through Dabur Investment.
The family has a minority stake in DMI Finance through Gaurav Burman’s Windy Investments Pvt. Ltd.
“The (Burman) family runs all its businesses professionally, and the family over time, has built and acquired various businesses. Each of these are run by independent boards and managements, and that’s what we plan to do with Religare as well," Burman said.
He said the family is “very focussed" on business-to-consumer (B2C) businesses and has bought stakes in fast-moving consumer goods firms (Dabur and Eveready), healthcare (cancer diagnosis companies Oncquest and Healthcare at Home), and hospitality (Lite Bite Foods and Taco Bell), besides financial services.
“Religare goes well with our strategy as it has an incredible health insurance and broking platform. We believe the company has a good array of businesses namely broking, health insurance and housing finance. We want to grow these businesses out," he added.
The Burmans raised their holding in Religare over five years since acquiring a 9.9% stake in April 2018. In June 2021, it had raised its stake to 14% and acquired an additional 7.5% in August this year, before informing exchanges on 25 September that it would raise its stake to over 25%.
This triggered an open offer; the family, through four entities, offered to acquire an additional 26% stake which, if fully successful, will take their total shareholding to over 53%. As Religare has no promoters, the Burmans have offered to buy an additional stake in the open market.
After declining by over 7% on Monday, the company’s shares concluded Tuesday at ₹245.2 apiece on the bourses, above the Burmans’ offer of ₹235 apiece. The family has informed the exchanges that they will appoint additional directors to the board after finalizing the deal, and will retain the right to change the management.
