In a regulatory filing, REL shared a letter from Danny Gaekwad Developments & Investments, addressed to Sebi Chairperson, requesting an exemption from strict enforcement of the Substantial Acquisition of Shares and Takeovers (SAST) Regulations. The letter, dated February 1, appeals for permission to make a public announcement for a competing offer against the Burman family's open offer under Regulation 20 of the SAST regulations.
Additionally, the entity has urged Sebi to put the Burman family's open offer on hold, enabling public shareholders to tender their shares in both the Burmans' open offer and the proposed competing bid.
Furthermore, Danny Gaekwad Developments & Investments has reached out to the Reserve Bank of India (RBI), requesting permission to establish an escrow account with a scheduled commercial bank and deposit ₹60 crore for the competing open offer. It has also sought an unconditional and irrevocable bank guarantee of ₹540 crore from a scheduled commercial bank in favor of the manager overseeing the competing offer.
Background and Competing Bids
This plea follows Sebi’s recent rejection of the competing open offer by Danny Gaekwad Developments & Investments. Digvijay Laxmansinh Gaekwad, who identifies as a globally recognized investor, has proposed acquiring shares of REL at ₹275 per share—17% higher than the ₹235 per share bid offered in the Burman family's open offer.The Burman family’s open offer to acquire an additional 26% stake in REL began on January 27, following regulatory approvals. The offer aims to acquire up to 9,00,42,541 fully paid-up equity shares of ₹10 each, representing 26% of REL’s expanded voting share capital, through four entities: Finmart Private Ltd, Puran Associates Private Ltd, VIC Enterprises Private Ltd, and Milky Investment & Trading Company.
If the open offer is successful, the Burman family’s stake in REL will rise to 53.94%. Meanwhile, Digvijay Laxmansinh Gaekwad’s proposal seeks to acquire a 55% stake in the company.
Regulatory Developments
In December 2024, the RBI approved the Burman family's open offer to acquire the additional 26% stake in REL. As of September 30, 2024, the Burmans collectively owned a 25.12% stake in REL through four entities.The Burman family, promoters of FMCG giant Dabur India and other businesses such as Eveready Industries, announced a ₹2,116-crore open offer in September 2023 to acquire a 26% stake in REL.
However, the open offer has been mired in controversy. Following the bid, the Burmans accused REL’s leadership of insider trading violations and appointing board members of their choice. Independent directors of REL countered these claims, raising concerns about alleged fraud and breaches by the Burman family entities. These allegations have been escalated to regulatory bodies, including Sebi, the RBI, and the Insurance Regulatory and Development Authority.
As the regulatory battle unfolds, Sebi’s decision on Danny Gaekwad Developments’ latest plea remains a crucial factor in the ongoing corporate tussle over Religare Enterprises.