Dabur India Chairman Open to Amicable Solution Amid Religare Enterprises Valuation Dispute

Recent weeks have witnessed a contentious public disagreement between the Burman family, Dabur India's promoters, and Religare Enterprises' board over the valuation of an open offer. However, Mohit Burman, Chairman of Dabur India, has asserted the family's openness to an 'amicable resolution' amidst the conflict. In a dialogue with Piyush Shukla and Viveat Susan Pinto, Burman shed light on the family's continued support to Religare Enterprises, financial injections in times of need, and elucidates the current situation.

Long-standing Support and Sudden Disputes

'In the last five-six years, we have stood with the company. Every time, its businesses needed capital, we pumped in money,' Burman conveyed. This support extended to a substantive role as lead investors, inspiring confidence among other shareholders. The management of Religare Enterprises had previously expressed gratitude towards the Burmans and affirmed a commitment to joint efforts aimed at propelling the company forward. Yet, following the Burmans' support in reinstating the Chairperson, the board criticized the offered share price as insufficient, marking a dramatic shift in stance and prompting the Burmans to present their perspective through exchanges' communications.

Clarification and Valuation Challenges

Burman explained that the intent of the controversial letter was to notify Religare Enterprises' Board about the proposed open offer following a conversation with the Chairperson who seemed supportive at the time. However, post discussions, the management's perspective changed, questioning the offer price of Rs 235 as inadequate despite it being higher than the regulatory determined value prescribed by the Securities and Exchange Board of India SEBI which was Rs 220.15. Religare Enterprises countered by proposing the appointment of two independent consultants to establish a fair share value, though Burman insists that market conditions and shareholder decisions are the ultimate determinants of fair price.

Strategic Stake Acquisitions and Forward Plans

The Burmans picked stakes in Religare Enterprises in tranches, deliberately avoiding an open offer to maintain lower acquisition costs. However, the family did seize opportunities to invest during low share price periods, showcasing strategic timing and commitment. As for the acquisition process, Burman anticipates regulatory approvals from Irdai, CCI, and SEBI to smoothly follow through. Furthermore, the Burmans intend to complement the existing board post-takeover while bringing in their own nominees to support governance improvements.

Market Sentiment and Future Outlook

Religare's current share price fluctuates below the open offer level, a situation Burman attributes to operational challenges including a lending cap imposed by the RBI and unsettled debts, notably a Rs 370 crore obligation to ICICI Bank IBN. He remains optimistic about the future, envisioning the recovery as new management strengthens the company's reputation, lifting borrowing restrictions, and improving credit ratings, leading to better debt repayment prospects.

Aiming for Resolution Despite Challenges

The Dabur India Chairman expressed his disinclination towards drawn-out disagreements, emphasizing the priority of business benefits over ego confrontations. Committing to an open-minded approach towards constructive solutions, the Burman family displays a willingness to navigate through the current dispute and favorably resolve matters for Religare Enterprises’ advancement.

Dabur, Religare, Valuation, Conflict, Resolution, SEBI, OpenOffer, Acquisition, Regulatory, Market, Shareholders, Investment, IBN