Burmans may need to top up Religare with ₹5,000 crore

The billionaire Burman family may have to invest as much as ₹5,000 crore in the companies under Religare Enterprises Ltd, stabilize its management and buy out some of the early investors of subsidiary Care Health after it takes reins of the financial services conglomerate, industry experts said.

- Anirudh Laskar

The Burmans last week concluded their open offer for Religare 18 months after first proposing it, while shareholders ousted chairperson Rashmi Saluja at their annual general meeting on 7 February.

Care Health, valued at ₹10,000 crore at its last rights issue more than three years ago, is seen as the crown jewel of Religare, but its financials in the December quarter were worse than those of its listed peers.

While Niva Bupa Health Insurance Co. Ltd and Star Health and Allied Insurance Co. clocked profits of ₹13.24 crore and ₹215 crore respectively, Care Health posted a net loss of ₹50.87 crore.

"For driving Care's growth and to address any losses, the promoters need to infuse capital. Over the past few years, standalone health insurers have grown faster than general insurers and going forward, this trend may continue. The Burman family may need to inject ₹3,000-5,000 crore to kickstart the NBFC arm business and catalyze the growth of Care Health," the chief executive of a large insurance company said on the condition of anonymity.

According to Abizer Diwanji, founder of NeoStrat Advisors LLP, Burmans may have to invest up to ₹5,000 crore in Religare.