Under the proposed scheme of arrangement, REL will retain its stake in Care Health Insurance Limited (CHIL) which will continue as an insurance-focused entity. The Financial services business comprising lending activities, broking activities, investment activities and ancillary and support services will be transferred to RFL on a going concern basis.
The demerger is designed to achieve four key objectives:
- Streamlining businesses: Segregation of financial services from insurance to create independent, focused entities that can attract different investor profiles suited to each sector.
- Listing financial services business: Separate listing of RFL to unlock value for shareholders and enable pursuit of distinct growth opportunities.
- Focused management attention: Enable mapping of employee performance and rewards to respective business outcomes, and facilitate attraction and retention of sector-specific talent and resources.
- Risk management and compliance: Implement risk management policies and internal compliance frameworks tailored to each business, improving monitoring and control.
As consideration for the demerger, RFL will issue fully paid-up equity shares to REL shareholders on a 1:1 basis. Post-demerger, RFL’s shareholding pattern will mirror REL’s pre-demerger shareholding.
“We are simplifying our corporate structure to create two focused, well-capitalised and agile entities with distinct mandates. Each entity will benefit from improved capital allocation efficiency, enhanced transparency for investors, and the ability to optimize its capital structure based on its business characteristics and growth requirements,” Pratul Gupta, Chief Financial Officer, Religare Enterprises, said.
This transaction is expected to broaden our combined investor base, reduce complexity, and create two well-capitalised platforms ready to pursue their strategic ambitions independently. We are confident that this transformation will establish both entities as leaders in their respective domains, each with the resources, focus, and flexibility to capitalise on significant growth opportunities ahead, he said.
Post-demerger, RFL will be listed on BSE and NSE with mirror image shareholding as REL. The demerger will be implemented through a Scheme of Arrangement to be filed with and approved by the Hon’ble National Company Law Tribunal (NCLT).
The company expects to complete the demerger process and list RFL in Q1 of FY28.
There will be no interruption to business operations and no impact on employees, customers, or partners during the implementation period, it said.
