US investor Danny Gaekwad Developments & Investments seeks Sebi exemption for Religare takeover

In a regulatory filing, REL posted a letter written by Danny Gaekwad Developments & Investments addressed to Sebi Chairperson, requesting for grant of exemption from strict enforcement of Substantial Acquisition of Shares and Takeovers (SAST) Regulations, regulation

US-based entity Danny Gaekwad Developments & Investments on Monday urged capital market regulator Sebi to reconsider its proposal for a competing open offer proposal for Religare Enterprises Ltd (REL).

In a regulatory filing, REL posted a letter written by Danny Gaekwad Developments & Investments addressed to Sebi Chairperson, requesting for grant of exemption from strict enforcement of Substantial Acquisition of Shares and Takeovers (SAST) Regulations, regulation. In the letter dated February 1, it has requested the Securities and Exchange Board of India (Sebi) to allow the company to make a public announcement for competing offer in relation to Burmans’ open offer under regulation 20 of the SAST regulations. It also urged Sebi to issue a direction to keep Burmans’ open offer in abeyance so that the public shareholders are able to tender their shares in both, the Burmans’ open offer as well as their proposed competing offer.

Besides, the entity requested the RBI to establish an escrow account with a scheduled commercial bank for the purposes of the competing open offer wherein Rs 60 crore would be deposited. It also requested RBI Governor to provide an unconditional, irrevocable and on demand bank guarantee in favour of the manager to competing offer from a scheduled commercial bank for an amount of Rs 540 crore.

The request comes days after Sebi rejected the competing open offer made by Danny Gaekwad Developments & Investments. Digvijay Laxmansinh Gaekwad, who claimed to be a globally recognised investor, has offered to pay a 17 per cent higher price of Rs 275 per share of REL as against open offer price bid of Rs 235 per equity. Burmans’ Religare Enterprises’ open offer to acquire an additional 26 per cent stake from the open market commenced on January 27 following the regulatory approvals.

The open offer is for the acquisition of up to 9,00,42,541 fully paid-up equity shares of face value of Rs 10 each, representing 26 per cent of the expanded voting share capital of REL from the public shareholders. Finmart Private Ltd, Puran Associates Private Ltd, VIC Enterprises Private Ltd and Milky Investment & Trading Company. Following the open offer, Burman’s stake in REL would rise to 53.94 per cent, while Digvijay Laxmansinh Gaekwad proposes to pick 55 per cent stake in the company.

The Reserve Bank in December approved the open offer of the Burman family — the promoters of FMCG major Dabur — to acquire an additional 26 per cent stake in NBFC firm Religare Enterprises Ltd (REL). As of September 30, 2024, Burmans, through its four entities, collectively owns a 25.12 per cent stake in REL. The Burman family — a promoter of Dabur India and other entities such as Eveready Industries — through its entities, in September 2023 announced a Rs 2,116-crore open offer to REL shareholders to acquire up to 26 per cent stake in the company.

Soon after the open offer bid, Burmans complained to capital market regulator Sebi for violation of insider trading rules by the chairperson and appointment of board of her choice. However, it was contested by REL independent directors, who raised red flags alleging fraud and other breaches by Burman family entities and approached regulators, including markets regulator Sebi, the RBI, and the Insurance Regulatory and Development Authority.