RBI asks Religare to submit fresh application for stake transfer of RHDFCL

The Reserve Bank of India has rejected Religare Enterprises’ proposal to buy 87.5 per cent stake in Religare Housing Development Finance Corporation Limited (RHDFCL), a subsidiary company of Religare Finvest Ltd., and asked it to submit a fresh application.

Religare Finvest Limited (RFL) is a wholly owned subsidiary of Religare Enterprises.

Religare Enterprises entered into a Share Purchase Agreement on April 5 with Religare Finvest Limited and Religare Housing Development Finance Corporation Limited for acquisition of entire 87.5 per cent equity stake of RHDFCL held by RFL, Religare Enterprises said in a regulatory filing on Thursday.

The Reserve Bank of India (RBI) has returned the application made by RHDFCL for prior approval with an advice to submit a fresh one with complete information, it said.

In pursuance of the Share Purchase Agreement, RHDFCL would submit the application in due course, it added.

RFL was put under the Corrective Action Plan Framework by the RBI in January 2018 due to corporate governance issues.

In March 2023, RFL completed the One Time Settlement (OTS) of its secured and unsecured debt with its 16 lenders by payment of Rs 2,178 crore. Post OTS, the outstanding unsettled unsecured debt is Rs 330 crore (secured debt is nil) as of March 31, 2023.

However, RFL is still placed under RBI’s Corrective Action Plan.