Religare Enterprises Ltd is in early talks with private equity (PE) investors to sell 6-7% in its subsidiary Care Health Insurance Ltd to raise as much as ₹1,200 crore, three people close to the matter said.
The talks are at an initial stage, one of the three people said on condition of anonymity.
Religare is seeking very high valuations for its stake, in line with the robust performance of health insurance businesses in the country, a second person said, also declining to be named. “However, it is unlikely that they will be able to raise such a high amount.”
A Religare spokesperson declined to comment.
Care Health Insurance reported a 32% rise in its annual gross direct premium to ₹5,142 crore for the year ended 31 March 2023 from ₹3,881 crore a yea ago. Additionally, the firm’s net written premium rose nearly 50% to ₹4,591 crore from ₹3,088 crore in FY22.
The group sold a minority stake in the business to PE fund Kedaara Capital Investment Managers Ltd for ₹567.3 crore in 2020. It gained a 6.39% stake in the insurer, valuing the health insurer at ₹4,183 crore.
The deal with Kedaara came three years after Religare agreed to sell the health insurance unit to a group of investors led by PE firm True North. However, that deal collapsed.
“The capital will be used by the group to rejuvenate its other businesses. The roadmap to revive the group has been drawn, and this capital raise will help fund some of the cash-strapped businesses of the group,” the third person said.
Last year, Religare said it was looking to raise ₹300 crore through a rights issue to grow its health insurance business. In an interview, Rashmi Saluja, the group’s executive chairperson, said: “We are building a war chest to finance the growth of all subsidiaries, including health insurance. We will raise more funds before the year-end.”
Founded in 2012 by brothers Malvinder and Shivinder Singh, who are facing fraud charges, Religare is now led by new management working to put legacy issues behind it and chart a turnaround through a multi-pronged strategy for its financial services division.
