The Board of Religare Enterprises Limited (REL) has approved a Scheme of Arrangement to demerge its Financial Services business into Religare Finvest Limited (RFL). REL will retain its insurance interests (Care Health Insurance), while RFL will become a separately listed entity focusing on lending, broking, and investments. The transaction is structured as a 1:1 share swap, subject to regulatory and shareholder approvals, aiming to unlock shareholder value by creating two focused platforms.
Approval of Strategic Demerger Scheme
At the Board meeting held on February 14, 2026, Religare Enterprises Limited (REL) considered and approved the Scheme of Arrangement involving Religare Finvest Limited (RFL). This scheme facilitates the demerger and vesting of the Demerged Undertaking from REL into RFL on a going concern basis.
Structure of the Demerger
The arrangement is designed to create two independent listed entities:
- Demerged Company (REL): Will retain the insurance business, including its stake in Care Health Insurance Limited (CHIL).
- Resulting Company (RFL): Will receive the entire Financial Services business, encompassing lending activities, broking activities, investment activities, and ancillary support services. RFL will also see the consequent reduction and cancellation of its entire pre-scheme share capital.
The turnover for the Demerged Undertaking for the year ended March 31, 2025, was INR 457.29 Crores, representing 6.2% of the Company’s total consolidated turnover.
Rationale for the Separation
The key objectives driving this demerger include:
- Streamlining Businesses: Creating independent entities to attract specialized investors suited to the distinct risk profiles of the financial services and insurance sectors.
- Focused Growth: Allowing the businesses comprising the Demerged Undertaking to pursue differentiated strategies aligned to their specific market dynamics.
- Enhanced Governance: Enabling better risk management, compliance frameworks, and management focus for each distinct platform.
- Value Unlocking: Creating a separate publicly listed company for the Financial Services business to pursue new growth opportunities and create sustainable value for shareholders.
Share Exchange Ratio and Listing
The transaction involves a share swap without any cash consideration:
- Consideration: Shareholders of REL will receive “1 fully paid-up equity share of INR 10/- each of the Resulting Company (RFL)” for every “1 equity share of INR 10/- each of the Demerged Company (REL)” held on the Record Date.
- Shareholding Pattern: Post-scheme, RFL’s shareholding pattern will mirror REL’s pattern. There will be no change in the shareholding pattern of REL.
- Listing: The equity shares of the Resulting Company (RFL) will be listed on both the BSE and NSE.
Next Steps
The Scheme is subject to approvals from shareholders, creditors, the Securities and Exchange Board of India, the Reserve Bank of India, and the Hon’ble National Company Law Tribunal (NCLT). The company endeavors to complete the process and list RFL in Q1 of FY28, assuring no interruption to business operations during the transition.
Source: BSE
