Dr Rashmi Saluja,
, talks about the NBFC’s latest funding round. Edited excerpts:
ET Now: Give us some details on this infusion of new funds and induction of new marquee names as shareholders.
Dr Rashmi Saluja: We are raising Rs 570-odd crore to infuse not only in RFL but in other businesses of broking and housing finance as well. We have had a great response from the existing shareholders and the new shareholders that have come in. Existing shareholders have gone higher in their stake. There is the Burman family, Ares SSG, Lakhi family, Modi family, then we have got Plutus Wealth Management, then we have Madhu Kela and J Master joining in.
It just shows the confidence that the market has in Religare Enterprises.
The Burmans are close to 15%, so they are largest in our group. All of them have been very supportive of us. They did not think at all that during this difficult time the fund raising will have been appropriate or not.
It has been very positively received and the board continues to be a strong one. The board keeps getting guidance from the shareholders and from the regulator. Apart from that, the board is independent and we are always open to enriching our board as and when needed.
The Burmans are followed by the Modi family at around 12%-13%, and the Lakhi family at around 10%. Can you tell us if you would be getting board representation from the three-four large shareholders after the latest infusion?
The very fact that these shareholders have trusted the management and the existing board speaks volumes about their confidence. Any person who can add value to and strengthen the board is more than welcome. But there is absolutely no demand from the shareholders at all. They have shown full trust confidence in the existing management and the existing board.
A lot is happening on the NBFC front. Are you also looking at inducting high-quality professionals to run operations? Also, how does your NBFC’s net worth look like after the fund infusion?
NBFC and banks are always going to coexist in a space that’s definitely going to get bigger. As for RBI regulations, I feel it’s basically a reward-and-punishment policy. The NBFCs that are good are actually being promoted and looked after, with banks showing full support.
Out journey started badly, because we are under CAP since 2018. But today we are getting a good response from the market, lenders and regulators because of the intent that we have shown by repaying Rs 7,000-odd crore and actually getting into restructuring which is a fair value for the lenders and for us. That is how the confidence has been built.
Growth for us is going to be both organic and inorganic. The thought that RBI is motivating good NBFCs to convert into bank is also there. But of course we are very happy in the space that we are in. After the debt restructuring process, the valuation of our NBFC is going to go up multifold. We are looking not only to infuse equity but also getting additional line of more than R 2,000 crore.
Lenders have also been very cooperative, driven by the understanding that for NBFCs the core requirement is money. Once the debt restructuring process is over — in maybe around two months’ time — I will tell you in detail how our NBFC is shaping up, what are our future plans, etc.
As of now we want to get back to future business as early as possible. We have already made a couple of representation to the RBI. The regulator appears willing to remove us from the CAP. Very soon you will see us back in action.