We will become a 360-degree financial services provider, says Religare chief

Religare Group is strengthening its existing businesses and plans to launch new ones in the next two to three years to become a “360-degree financial services provider”.

“We will relaunch the business in the NBFC, Religare Finvest (RFL), where a single settlement will be reached very soon. And that will be one of the big starts for us. We have laid the foundations of the company very well. We plan to start new businesses that are synergistic,” Rashmi Saluja, executive chairman of Religare Enterprises (REL), told FE in an interview.

REL is a diversified financial services group with operations across three verticals – NBFC, health insurance and retail brokerage. Saluja said the group will launch asset reconstruction company (ARC), asset management company (AMC) and insurance brokerage businesses, among others.

“We will also continue to inject money into the growth of our securities, brokerage and insurance businesses. Thus, in the next 2-3 years, we will ensure that all our businesses are profitable or become profitable. And, of course, we will create these four out of five companies,” Saluja said.

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Religare’s leadership under Saluja’s leadership has revitalized the business and set it on the path to sustainability and growth. The financial services group has endeavored to resolve the group’s legacy issues and restore its place as a major player in the BFSI sector. The company has received stock exchange approval to declassify the former promoter group by specifically naming those individuals and their entities as public shareholders.

The company’s health insurance business, Care Health Insurance, as well as the retail brokerage business became profitable. The group’s NBFC, Religare Finvest (RFL), worked with capital market regulator Sebi and resolved legacy issues by paying a one-time fee to the regulator.

REL was facing tough times due to problems in its lending vertical (Religare Finvest) due to past irregularities by former promoters and ex-executives. “The wrongdoing led to RFL being subject to RBI’s Corrective Action Plan (CAP) in January 2018, which inter alia prohibited RFL from expanding its credit portfolio and not paying any dividends. Since then, RFL has is focused on collection and collections to meet its repayment obligations to lenders,” according to the company’s annual report.

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Due to the reduction in loan asset portfolio due to payments, prepayments and foreclosures by borrowers, RFL’s income decreased to Rs 173.59 crore in FY22 from Rs 295 crore. Rs.57 crore in FY21. “For the NBFC, over the past three years we have been able to return around Rs 8,000 crore to the banks. Our collections teams ensure that we collect the money (from customers). The group will also invest money to revitalize the business,” Saluja informed.

She said the combined ratios, a measure of the profitability of a non-life insurance company’s underwriting, for Care Health Insurance are around 103-105%. “Sometime next year we expect to bring the ratio back below 100,” she added.

The Care Health Insurance business is the second largest among standalone insurers and, in a rising market, was valued at around Rs 15,000 crore in 2021. Private equity firm Kedaara Capital has acquired a stake of nearly Rs. 17% in the company by injecting 567 crore rupees.

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