Religare Enterprises is raising $75 million (Rs 400 crore) from World Bank arm IFC, according to a company statement. The board of the diversified financial services business, promoted by the billionaire brothers Malvinder and Shivinder Singh, will meet on September 29 to consider the proposal.
VCCircle was the first to report in May this year that Religare could be looking to raise up to $75 million from the World Bank arm. Religare is expected to make a preferential issue of compulsory convertible debentures to IFC.
Interestingly, IFC had also invested $25 million earlier this year in Super Religare Laboratories, the diagnostics business promoted by the Singh brothers.
Shares of Religare Enterprises were trading at Rs 329 a unit at 11:57 am on the BSE, up 3.28 per cent. This gives Religare a market capitalisation of Rs 4,915 crore, based on which IFC could end up with 7.5 per cent stake (on a post-money valuation basis).
Reliagre also said today that money manager Invesco Ltd will buy 49 per cent stake in its asset management unit, Religare Asset Management Company.
Religare’s inorganic push
Religare has diversified its business over the past four years through organic and inorganic routes across broking, insurance, asset management, lending solutions, investment banking and wealth management space.
While it has made major overseas acquisitions in areas like asset management (Landmark and Northgate Capital) and securities (Noah Financial, Hichens Harrison), it has also bought relatively smaller India players to enter new businesses like mutual funds (Lotus AMC) and housing finance (Maharishi Housing Development Finance Corporation).
Religare’s SME lending and housing finance businesses are housed under Religare Finvest, which continues to be the flagship contributing more than two-thirds of the parent firm’s revenues. This entity has raised a combined private equity funding of Rs 350 crore from Avigo Capital Partners and Jacob Ballas Capital besides recently launching a non-convertible debenture issue. Religare Finvest has over 25,000 small business customers and currently has a loan book of nearly Rs 12,000 crore. It also plans to double its loan book with a focus on SMEs in the next three years.
For Q1 FY13, Religare Enterprises reported over 14 per cent rise in revenues to Rs 860 crore while it also turned a PAT of Rs 40.2 crore, compared to Rs 150 crore loss during the same period last year.
Also related: IFC may invest up to $75M in Religare Enterprises
(Edited by Sanghamitra Mandal)