Shares of Religare Enterprises Ltd surged over 3 percent on March 2 after the company informed exchanges that it was debt-free and was planning to foray into several new segments.
At around noon, the stock was trading at Rs 127 on BSE, up 3.4 percent from the previous close.
The firm repaid Rs 185.50 crore it owed to its arm Religare Finvest Ltd (RFL). Religare Enterprises also said in a note to exchanges that it will enter new strategic sectors including asset reconstruction, alternate investment funds, insurance banking and digital wealth management, embarking on a new era of growth, the company told exchanges.
"The identified sectors have business synergies with existing BFSI verticals of Religare Enterprises and this should have a multiplier effect in Religare Group's business and FInancial performance,” it said.
Led by a new management and professionally run independent board, Religare Group's efforts to put the legacy issues behind and chart a turnaround by adopting a multi-pronged strategy for its financial services verticals, resulted in marked improvement in business performance and value unlocking for its shareholders, the firm said.
Religare Enterprises chairperson Rashmi Saluja said REL was providing the necessary growth capital to all its operations and was set to expand in new BFSI verticals.
The firm was also in the process of creating a war chest to grow the new ventures organically and inorganically.
RFL has been in financial distress due to alleged misappropriation of funds by erstwhile promoters Malvinder Singh and his brother Shivinder Singh.
Multiple investigative agencies, including the Enforcement Directorate and the Economic Offences Wing of the Delhi Police, are probing financial bungling and have initiated legal proceedings against the Singh brothers.
The Reserve Bank of India (RBI) put the company under a corrective action plan in January 2018.
The central bank said in February that the RFL resolution plan couldn’t be proceed with Religare Enterprises continuing as promoter since RFL exposure was treated as fraud. REL moved the Delhi high court, which put the RBI order on hold.
"While we have overcome most challenges and legacy issues, and are now into a growth phase, we have to ensure we recover the funds and assets which are rightfully owned by our companies, Religare Enterprises and Religare Finvest.
“These assets and funds belong to shareholders and lenders of these companies and it is our duty to do justice to that; hence we are pursuing all legal and corrective resources to ensure that we make good of financial losses and irregularities,” Saluja recently told Mint.
The revival of Religare Finvest, which suffered due to the “wrong actions of past promoters and management”, was a priority, she said.
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