Proxy governance firm raises red flag over Religare's fund infusion into MIC Insurance

InGovern observed Religare board has not provided any rationale for the fund infusion and has also not disclosed any details regarding financials or valuations of MIC

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26 Aug, 2025 12:21

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A proxy governance firm has raised red flag over plans of Religare Enterprises to infuse fresh funds into its subsidiary MIC Insurance Web Aggregator. Religare has sought shareholder approval for infusing Rs 15 crore fresh capital by the way of subscription to shares. The postal ballot is currently in progress and the results would be announced on March 23.

In a research report, proxy advisory firm InGovern observed Religare board has not provided any rationale for the fund infusion and has also not disclosed any details regarding financials or valuations of MIC.

Normally, listed companies don’t need to seek shareholder approvals for smaller fund infusion transactions. However, in the current case Religare needs a shareholder nod since it is on verge of being taken over by the Burman Group. The open offer for the same in currently in progress.

“Given the uncertainty and regulatory probe which Religare is already subjected to, as well as the imminent change in promoters and management which may take place post takeover by Burman group, the above investment should be kept at bay at this juncture. We recommend shareholders vote against the resolution,” InGovern said in a report published this month.

Religare had acquired 100 percent equity stake in MIC from IGEAR Holdings Private Limited in December 2023. The board of Religare sought shareholder approval for the transaction saying MIC is at a growth stage and requires financial support for its business.

InGovern also pointed out the mounting contingent liabilities on the company. As on March 31,2023, the company had liabilities to a tune of Rs 5,416 crore.

The company has also sought shareholder nod for amending certain articles of association of the company. Specifically, the company wants to delete certain special shareholder provisions entered between Religare and erstwhile promoters Malvinder Mohan Singh and Shivinder Mohan Singh.