Florida investor makes counter-offer for Religare Enterprises

In a surprising twist concerning the Burman-Religare deal, an India-born investor from Florida has made a competing open offer to acquire a 26% stake in Religare Enterprises. This move challenges the Burman family’s existing open offer for an additional 26% stake in the New Delhi-based financial services firm. The Burmans, promoters of FMCG major Dabur Ltd, made the open offer to comply with regulatory requirements that were triggered when they acquired 25% of the listed Religare.

Digvijay (Danny) Laxmansinh Gaekwad has proposed to purchase shares of Religare at Rs 275 each, representing a 17% premium compared to the Burmans’ offer price of Rs 235 per share. The unexpected proposal comes as the Burmans prepare to launch their open offer on January 27. At the close of trading on Friday, Religare shares were priced at Rs 248 each on the NSE.

In a letter addressed to Sebi chairperson Madhabi Puri Buch, Gaekwad, owner of Danny Gaekwad Developments and Investments, a real estate investment firm, explained his rationale for the counter open offer. He stated that the Burmans’ open offer significantly undervalues Religare and is not in the best interest of public shareholders.

He also emphasized that unlike the Burmans, his group does not have any other non-banking financial services company (NBFC) and can therefore dedicate undivided attention and adequate capital to the business.

Gaekwad, the son of a judge, was born in Baroda and graduated in political science from Maharaja Sayajirao University of Baroda. He arrived in the United States with his wife, Manisha, in 1987 to pursue the American dream. Since then, he has built over a dozen small-and medium-sized companies in various industries. He is the founder of NDS USA, an IT and cloud services company, as well as Danny G Management, a company that operates hotels and restaurants.

Gaekwad pointed out that the Burmans’ open offer does not specify how they plan to meet the RBI-mandated requirement for consolidating NBFCs within the Religare and Burman groups, and how this will affect Religare shareholders.

Due to the lack of transparency, Gaekwad expressed uncertainty about the Burman group’s genuine intentions regarding compliance with the RBI mandate. As a result, public shareholders of Religare are left uninformed and unable to determine if the Burmans' open offer is genuine or undervalued, his letter dated January 24 to Sebi said.

Gaekwad has sought Sebi’s permission to launch the competing offer. He has also requested the regulator to temporarily suspend Burmans’ open offer. This would allow the public to tender their shares in both the Burmans' offer and his competing offer at the same time.