Religare has huge potential; I am looking at 53% stake: Danny Gaekwad

In an exclusive conversation with Fortune India, Florida-based serial entrepreneur Laxhamsinh ‘Danny’ Gaekwad opened up about his ambitious bid to gain control of Religare Enterprises, a prominent player in India’s non-banking financial company (NBFC) landscape. Gaekwad’s move is not just another investment; it reflects his deep conviction in Religare’s potential as an undervalued financial services giant with untapped opportunities in key areas such as insurance, lending, and broking services. Gaekwad’s entry into the fray comes in the form of a competing open offer for REL’s shares, priced at ₹275 per share—a significant 17% premium over the Burman family’s offer of ₹235 a share.

While Religare is currently in the midst of a power struggle between the Burmans and the existing management led by chairperson Rashmi Saluja, Gaekwad does not see it as a battle but as a strategic game. “I am not here to fight but see it more as a challenging game about who can offer true value to all the stakeholders,” states Gaekwad. His approach seems collaborative, especially when considering the potential resistance from the Burmans, the current majority stakeholders. Gaekwad is open to acquiring a majority control of 53%, beginning with an initial 26% stake. Interestingly, he is open to buying out the Burmans too. “I have all the respect for the Burmans as they are one of the oldest business families, and respect for such legacies is essential. However, I believe I can create value for all the stakeholders, including the Burmans. If they are willing, I am ready to buy their stake,” reveals Gaekwad.

Religare, despite its turbulent past, has managed to create a niche for itself in the financial services sector. Its broking business is as a key vertical, positioned to leverage the growing equity penetration story in the country. The company also operates in health insurance, besides offering loans to small and medium enterprises. These areas, the 65-year-old businessman believes, are aligned with India’s economic trajectory under the Narendra Modi-led government, which has championed reforms to bolster the financial ecosystem.

“What stands out about Religare is its untapped potential. Its broking business, for example, is strategically positioned as a financial platform, and that’s not easy to achieve,” feels Gaekwad, who hails from Vadodara. He also underscores the opportunities in affordable housing and insurance, sectors poised for growth as India’s economy matures. “Affordable housing is a massive issue in India. Religare is well-placed to address these challenges through its lending and financial products,” he adds.

Expressing genuine admiration for the current management team, Gaekwad says: “I am impressed by Saluja and her team’s efforts in turning around Religare.” Though he admits that he is yet to meet Saluja or the company’s independent directors. “I have neither met the chairperson nor the directors,” says Gaekwad. Despite this, he is optimistic about garnering their support. “I want the current management to back my bid… I am open to meeting Saluja in the future,” he adds.

Gaekwad’s confidence in his ability to turn around Religare is backed by his extensive experience in financial services. In 2023, he founded Gala Bank in Ocala, Florida. “I am no rookie who has just waded into financial services. In fact, I have also been on the board of a large mortgage company in the past,” says Gaekwad. His expertise extends further through his partnership with Himanshu Patel, who has built a $3-billion portfolio comprising small banks across Florida, Georgia, and Alabama. Although Patel is not directly involved in the current bid for Religare, Gaekwad hinted at the possibility of his partner joining at a later stage, ensuring additional resources and expertise if needed. For now, Bathiya & Associates, one of Mumbai’s leading M&A consulting firms, is helping Gaekwad in his current endeavour.

On the question of whether he would consider increasing his offer price, Gaekwad is non-committal. “Why should I say what will happen…it’s too early to say,” he says, expressing his faith in the regulators, expecting them to take a balanced view of his proposal. “I believe they will do what is right for all stakeholders,” he remarks, adding that he has no clue of when the regulator will respond to his proposal.

Gaekwad’s approach to this acquisition reflects his overarching investment philosophy: identifying undervalued opportunities, infusing them with capital and expertise, and driving substantial growth. “I find the lowest value property and take it to the highest. That’s how I’ve made millions,” he shared, recounting his ability to transform struggling businesses into profitable ventures. For him, Religare represents a similar opportunity—a chance to unlock value in the coming years.

As the process unfolds, Gaekwad’s bid is likely to face scrutiny, but his track record, experience in financial services, and strategic partnerships bolster his position. Whether his vision for Religare comes to fruition remains to be seen, but he is confident of newer opportunities coming his way. “Even if I lose out on this opportunity, it’s not the end of the road for me… it’s not going to kill me,” remarks Gaekwad.

With regulatory decisions pending and the financial community watching closely, his gambit has set the stage for what could be one of the most significant transactions in India’s NBFC space.