Religare Enterprises Gets Interest From Some Investors For Religare Finvest

Religare Enterprises Ltd. has received feelers from some global and domestic investors for picking up stake in its fraud-hit lending arm Religare Finvest Ltd. to help clear dues of lenders.

In March this year, the Reserve Bank of India had rejected Religare Enterprises' proposal for sale of two of its subsidiaries, Religare Finvest and Religare Housing Development Finance Corp., to TCG Advisory Services.

The company was planning to sell its stake both subsidiaries for Rs 330 crore as a part of the company's debt resolution process.

According to banking sources, Religare Enterprises introduced a couple of investors for Religare Finvest to lenders in a meeting with bankers held recently.

"We are very satisfied with the way the entire debt restructuring exercise is moving and to this effect, the lenders meeting two weeks ago was meaningful and forward-looking. We even produced prospective investors to the lenders who are already doing detailed due diligence," Religare Finvest Chief Executive Officer Pankaj Sharma said when contacted on the status of debt restructuring.

He, however, did not divulge details of the same in terms of the number of suitors identified and how many are doing due diligence.

Once the banks give nod to a suitor from the list of carefully chosen potential entities by Religare Enterprises, the regulatory approval process would be sought post that.

Sharma, who is associated with Religare Enterprises for many years and took charge as CEO of Religare Finvest in August, highlighted the reasons for the restructuring of the company which only in 2016 commanded a portfolio of Rs 16,000 crore before its 'downhill journey' in the same year before reaching its 'nadir in 2018.

Siphoning off money by erstwhile promoters Singh brothers (Shivinder Mohan Singh and Malvinder Mohan Singh) resulted in a big hole in the company's finances. It was in 2018 "we reached our nadir major equity holders came together and ousted Singh brothers and put in place new professional management and board of directors to save the company and protect stakeholders' interests", he told PTI.

Even as the debt restructuring plan was progressing with the lenders, a simultaneous exercise for identifying potential partners was underway, he said, hoping that the entire process will be completed by January-March quarter.

Religare Enterprises' non-bank financial company Religare Finvest is at the centre of alleged misappropriation including fixed deposits with Lakshmi Vilas Bank.

Religare Finvest has been in financial distress due to alleged misappropriation of funds by erstwhile promoters Shivinder Singh and his brother Malvinder Singh.

Multiple investigative agencies, including Enforcement Directorate and Economic Offences Wing of Delhi Police, are probing the case of financial bungling and have initiated legal process against them.

Post financial irregularities amid massive leveraging, the RBI had initiated action and put the company under corrective action plan since January 2018 due to its weak financial health, which bars undertaking of any fresh business.

Having paid Rs 6,500 crore to lenders since the change of management in 2018, Religare Finvest should complete debt restructuring by December to get out of the RBI's corrective action plan and start a new business from next financial year. The total outstanding debt stands at Rs 4,600 crore.