The board of Religare Enterprises Ltd (REL) has approved a plan to merge 11 of its subsidiaries with REL, the company said in a filing to the stock exchanges on Tuesday.
The plan is part of an effort by the group, run by brothers Malvinder Singh and Shivinder Singh, to consolidate its businesses and maintain an India-focused strategy.
“The proposed structure is aimed at streamlining the organization and is designed to allow REL to achieve its objective of following a focused, growth oriented strategy,” the filing said.
The units to be merged are Religare Securities Ltd (excluding its broking business), Religare Commodity Broking Pvt. Ltd, RGAM Investment Advisors Pvt. Ltd, Religare Venture Capital Ltd, Religare Arts Investment Management Ltd, Religare Capital Finance Ltd, RGAM Capital India Ltd, Religare Investment Advisors Ltd, Religare Support Services Ltd, Religare Arts Initiative Ltd and Religare Capital Markets (India) Ltd.
The new structure will reduce operational and administrative costs of maintaining multiple legal entities and focus resources on core businesses, REL said in the filing. The consolidation will not have an impact on the company’s shareholding pattern, according to the filing.
Religare Enterprises has been in the process of restructuring since the beginning of the current fiscal year. As part of the process, the group has decided to completely exit its asset management business. In April, it announced the sale of its entire stake in private equity and real estate secondaries -focused firm Landmark Partners. Simultaneously it also sold its stake in Northgate Capital.
The company said in May that it would reorganize its three businesses—finance, health insurance, and capital markets—as separate listed entities to simplify its structure and unlock value for shareholders.
REL, which has sold its stake in Asia-focused healthcare private equity firm Quadria Capital, will also look to exit YourNest, which acts as an angel investor.
In December 2015, Invesco, a US fund house and a sponsor of Religare Invesco Asset Management Co. Ltd bought out the entire shareholding of co-sponsor Religare Securities Ltd (51%) in the local fund house with assets of about Rs21,500 crore.
In October, The Economic Times reported that the Singh brothers had approached financial and strategic investors to sell Religare Finvest Ltd for as much as Rs6,000 crore.
Religare Finvest, a non-banking finance company, focuses on lending to small and medium enterprises.
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Source: Mint