Religare Enterprises shares fall 2.5% as firm announces demerger to unlock shareholder value

Religare Enterprises shares fall 2.5% as firm announces demerger to unlock shareholder value

• Religare to split into financial and insurance entities
• RFL to be listed with same shareholding as REL post-demerger
• No impact on employees, customers, or partners during transition

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Shares of Religare Enterprises Ltd (REL) fell 2.5% on February 16 as the Burman family backed-firm has approved a plan to demerge its financial services and insurance businesses into two separately listed entities, in a move aimed at unlocking shareholder value and sharpening strategic focus.

This is the first major restructuring announced by the company since Burmans took over REL in Feb 2025, the financial services firm said in a statement.

Under the proposed scheme of arrangement, REL will retain its stake in Care Health Insurance Ltd, which will continue as an insurance-focused entity, it said.

At 10:40 am on February 16, REL shares were trading 2.75% lower at Rs 237.33 apiece.

The financial services business -- comprising lending, broking, investment activities and related support services -- will be transferred on a going-concern basis to its subsidiary Religare Finvest Ltd (RFL), it said.

"As part of the demerger consideration, RFL will issue fully paid-up equity shares to shareholders of REL on a 1:1 mirror basis. Post-demerger, RFL will be listed on BSE and NSE with mirror image shareholding as REL," it said.

The company said the restructuring is aimed at streamlining operations by creating two independent entities, allowing each business to pursue sector-specific growth strategies and opportunities, it said.

The transaction will be implemented through a scheme of arrangement to be filed with the National Company Law Tribunal and is subject to statutory and regulatory approvals, including those from shareholders and creditors, it said.

The group aims to complete the process and list RFL by the first quarter of FY28, it said.

The company added that there will be no interruption to business operations and no impact on employees, customers or partners during the transition period.

The demerger is expected to strengthen oversight and control mechanisms while enabling more focused management attention aligned with the performance and objectives of each business, it added.

REL Chief Financial Officer Pratul Gupta said this transaction is expected to broaden the combined investor base, reduce complexity, and create two well-capitalised platforms ready to pursue their strategic ambitions independently.

This transformation will establish both entities as leaders in their respective domains, each with the resources, focus, and flexibility to capitalise on significant growth opportunities ahead, he said.