Religare group to sell equity in health insurance arm to Kedaara group for Rs 400 cr
REL has entered into a binding agreement with a Kedaara group entity, Trishikhar Ventures LLP, which is a private equity investment firm for investments in its health insurance subsidiary Religare Health Insurance Company Ltd (RHICL), it said in a release.
The company currently holds 88.95 per cent equity share capital in RHICL.
This deal will support the growth of the health insurance business and will enable REL to become debt-free after the completion of this transaction and the divestment of its lending business to the TCG Group, it said.
"This will, in turn, help the company emerge as a strong financial services company," the firm added.
The total deal value is pegged at Rs 400 crore, of which Rs 200 crore would be for the stake sale by REL while another Rs 200 crore would be brought in as primary equity capital by Kedaara.
The investor will also have the option of investing another Rs 100 crore.
The company said that pursuant to the above transactions, the company "would have divested part of its investment constituting 6.761 per cent of RHICL".
"Post consummation of this transaction, REL will hold 76.18 per cent stake in RHICL," it said.
Rashmi Saluja, non-executive chairperson of Religare Enterprises Ltd, said, "REL has been going through difficult times in the recent past and the new management has been taking important steps to not only strengthen corporate governance practices and compliances, but also capitalise the businesses for future growth."
Saluja also said this transaction will strengthen our position in the financial services business and will help us achieve our aim of becoming a debt-free company by June 2020.
Anuj Gulati, MD & CEO, Religare Health Insurance, said, "This transaction will enable us to increase our investment in technology, distribution and service capability."
REL said the transaction is subject to the Irdai approval and other regulatory and statutory approvals.
"The transaction is expected to be completed within the financial year 2020-21," Religare Enterprises Ltd said. KPM HRS