Religare Enterprises raises Rs 300 cr by divesting stake in RHICL to Kedaara Capital
Consequent to the capital raising, the company said it has retired previous loan and has become completely external debt free.
Earlier in April, Religare Enterprises Ltd (REL) informed about the proposed divestment of part of the investment of the company in Religare Health Insurance Company Ltd (RHICL) to Kedaara Capital Fund II LLP.
Kedaara Capital has acquired the stake through its subsidiary Trishikhar Ventures LLP (jointly referred as Kedaara).
In this regard, the divestment of part of the investment of the company in RHICL and infusion of primary capital in RHICL by Kedaara was completed on Tuesday, REL said in a regulatory filing.
"The total primary capital raised by RHICL from Kedaara is amounting Rs 300 crore. This is in line with Kedaara's additional subscription commitments wherein they had agreed to subscribe for the additional primary capital of Rs 100 crore in addition to their initial commitment of subscribing to primary capital of Rs 200 crore in RHICL," it said.
REL said the total investment made by Kedaara to acquire shares of RHICL is Rs 567.31 crore, which comprises primary capital infusion of Rs 300 crore in RHICL and Rs 267.31 crore for the purchase of RHICL shares from existing shareholders, including purchase of 6.39 per cent stake from the company against a consideration of Rs 200 crore.
Pursuant to these transactions, the shareholding of REL in RHICL now stands at 72.02 per cent on a paid-up capital basis. Further, it said that consequent to capital infusion by Kedaara, it has settled loan of Axis Bank.
"Out of the mentioned consideration received from the divestment of stake in RHCIL, the company has utilised Rs 153 crore towards the payment of the full and final settlement consideration under the consent agreement dated October 1, 2019, entered by the company and its subsidiaries with Axis Bank Ltd," it said.
With this, the company said it has become external debt-free.
Core investment company REL is engaged into lending, broking and insurance business through its subsidiaries.
"The settlement of our financial dues, much ahead of the prescribed time frame demonstrates our commitment to resolve all legacy issues and move forward on the path to revival," said Religare Enterprises Ltd Executive Chairperson Rashmi Saluja.
REL Chief Financial Officer Nitin Aggarwal said that while there were many headwinds and legacy issues, we have successfully resolved most of them and others are on the path to resolution. Among them, the Axis settlement stands out as an important milestone as it has made Religare Enterprises external debt-free.
He said REL has been on a course correction mode for the past two years and the company is steering the ship to ensure that all businesses perform to their full potential and accelerate growth.
After achieving the important external debt-free milestone, the company is well positioned to address all the requirements of other subsidiary businesses as well, REL added.
The healthcare insurance business is growing at almost 50 per cent CAGR (compound annual growth rate) over the past three years, and REL expects it to continue to grow at the same rate going forward.
The broking business has stabilised and started growing in 2020-21.
The company exuded confidence that for a turnaround in the current financial year owing to strong underlying group financial position on the back of long-term measures undertaken by the new board and management. KPM HRS