**Burman Family’s Open Offer for Religare Concludes Amidst Financial Challenges**
The Burman family’s open offer for Religare has officially wrapped up after an 18-month process, leading to the ousting of chairperson Rashmi Saluja. With a current market capitalization of approximately ₹7,700 crore, experts suggest that the family may need to inject significant funds—potentially up to ₹5,000 crore—into various businesses under Religare Enterprises Ltd. This capital infusion is seen as essential for stabilizing management and buying out early investors in the subsidiary Care Health.
The Burmans completed their open offer last week, following the shareholders’ decision to remove Saluja during the annual general meeting on February 7. Care Health, valued at ₹10,000 crore during its last rights issue over three years ago, is considered the crown jewel of Religare. However, its financial performance in the December quarter lagged behind competitors, with Care Health reporting a net loss of ₹50.87 crore, while Niva Bupa Health Insurance and Star Health posted profits of ₹13.24 crore and ₹215 crore, respectively.
To drive growth and address losses at Care Health, industry experts emphasize the need for capital infusion. The CEO of a major insurance company noted that standalone health insurers have been outpacing general insurers in growth, a trend likely to continue. The Burman family may need to invest between ₹3,000 and ₹5,000 crore to revitalize the non-banking financial company (NBFC) segment and stimulate Care Health’s growth.
Abizer Diwanji, founder of NeoStart Advisors LLP, estimates that the Burmans should invest at least ₹3,000 crore in Religare, which he believes is undervalued given its 63% stake in Care Health and the increase in premium income. He asserts that the conglomerate is worth over ₹8,000 crore, factoring in the holding company discount, and possesses the right businesses for growth. However, to justify the takeover effort, the Burmans must establish stability, resolve legal issues, and infuse capital within the next year.
Diwanji further emphasized that the ownership of the conglomerate—whether by the Burman family or another party—is less important than achieving peace and stability within the organization. He highlighted the necessity of amicably resolving issues with Saluja, noting that the Burmans, as the largest shareholders, have consistently provided capital when needed in recent years.
