The Burmans are on a quest to rewrite Religare's legacy; here's how

THE SAGA OF Religare Enterprises has been anything but subtle. Over the past two years, the financial services firm has found itself embroiled in a tumultuous struggle for control — an unrelenting drama marked by boardroom skirmishes, regulatory scrutiny, and backroom machinations. Now, as the dust finally begins to settle, the spotlight turns to a new chapter under the Burman family’s stewardship. The question is no longer who controls Religare — it’s what the Burmans intend to do with it.

The Burmans, scions of the Dabur empire, are hardly strangers to calculated risk. Yet their decisive move to seize control of Religare, an NBFC (non-banking financial company) with a troubled past, reveals ambitions far greater than mere financial stewardship. With a 25.16% stake secured after an exhaustive open offer process, they now hold the reins of a company that, for years, seemed caught in a spiral of mismanagement and controversy.

Religare’s share price is down 11% YTD given the broader meltdown in the markets with the benchmark Nifty falling 5% as foreign investors have sold off Indian equities worth $11 billion. With the company’s market capitalisation hovering near ₹7,837 crore (as of February 25), the valuation reflects cautious optimism — investors expect the Burmans’ reputation for operational diligence to breathe new life into the shadow bank.

“Without that alignment of purpose, management bandwidth and company resources were being consumed by courtroom battles, fighting the largest shareholder, and dealing with regulatory scrutiny. Now, the focus can shift back to business,” says Shriram Subramanian, founder and MD of InGovern Research Services, a governance advisory firm for investors and companies.

The Burmans, despite their decisive hold, have a lot to do. A beginning has been made with the appointments of Rajender Mohan Malla and Shrikant Shreeniwas Somani as non-executive and independent directors. Previous attempts to appoint directors such as Arjun Lamba, Abhay Agarwal, Ramanathan Gurumurthy, and Suresh Mahalingam had stumbled over regulatory hurdles, with the Reserve Bank of India withholding approval.

Besides, the broader regulatory landscape poses an equally daunting challenge. Though the Burmans’ current stake rests comfortably below the critical 26% threshold, any attempt to deepen their hold will necessitate RBI approval. More so, since the promoters are looking at a preferential allotment. Moreover, under Sebi’s Substantial Acquisition of Shares and Takeovers Regulations, 2011, any incremental acquisition exceeding 5% for those already holding over 25% could trigger an open offer. Yet, exemptions can be sought under Regulation 11, providing some regulatory breathing room if the Burmans can make a compelling case for strategic consolidation.

But beyond regulatory entanglements, the true question is: what is the grand vision for the NBFC, whose jewel in the crown is currently the insurance business? According to sources familiar with the Burmans’ thinking — who spoke off the record — the strategy revolves around three core pillars: rebranding, capital infusion, and leadership overhaul.

“They’re preparing for a complete transformation,” one insider reveals. “A new brand identity, fresh capital to stabilise the books, and an entirely new leadership team. The previous management structure was weighed down by controversy and inflated salaries. That’s going to change.”

Indeed, the departure of key executives — including the ousted chairperson Rashmi Saluja — has left a leadership vacuum. With roles like MD, CEO, CFO, and legal head currently vacant, the Burmans are expected to appoint fresh talent. Speculation suggests that an internal appointment could bring stability, but an external search could signal a deeper break from the past.

“They are professionals who have generally maintained a more board-driven approach, so unless someone was overly loyal or closely tied to the previous leadership, changes might be minimal. They need to appoint a full-time MD or CEO soon. There’s no reason to delay it. While appointing an MD might take longer than appointing directors or a company secretary, I think the search should begin soon, and the board will need to deliberate,” says Subramanian.

There is also the matter of business focus. Despite its diversified portfolio, insurance continues to generate the lion’s share of revenue. While the NBFC and broking arms contribute marginally by comparison, insiders suggest that significant strategic shifts could be underway at the holding company level — shifts that may redefine Religare’s identity in the coming years.

Yet, perhaps the most telling sign of market sentiment comes from institutional investors. Despite the open offer’s price point of ₹235, few were willing to tender their shares. The Burmans managed to acquire only 231,000 shares, representing 0.07%, under the open offer, which closed on February 13. “Why sell now?” a fund manager remarks privately. Currently, among prominent institutional investors, Motilal Oswal MF holds over 7% stake, while among prominent investors, Ashish Dhawan holds 2.3% stake.

For the Burmans, this is more than a financial play — it’s an opportunity to rewrite Religare’s legacy. Whether they can steer the company towards sustainable growth remains to be seen. But for now, all eyes are on what comes next for Religare.