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Investor Bets Big on Religare Amidst RBI Roadblock
2 Sep
Summary
- Ashish Dhawan increased his Religare stake to 7.41% despite RBI's demerger rejection.
- Religare Finvest faces regulatory scrutiny due to past promoter issues.
- Care Health's strong performance is masked by accounting changes in consolidated reports.
Star investor Ashish Dhawan has substantially increased his holding in Religare Enterprises, now owning 7.41% of the company, valued at approximately Rs 616 crore. This significant investment has occurred despite the Reserve Bank of India's (RBI) recent rejection of Religare's proposed demerger scheme.
The demerger aimed to separate Religare Finvest, containing lending and broking businesses, from the parent company which would retain its stake in Care Health Insurance. This scheme had received approvals from stock exchanges and SEBI but was ultimately declined by the central bank on August 6, 2026, with no explicit reasons provided.
Religare Finvest, the entity slated to receive the demerged businesses, has a history of being under RBI's corrective action due to past issues with its former promoters. This background likely contributes to the central bank's heightened caution regarding any restructuring involving this subsidiary.
Despite these regulatory hurdles and a contraction in operating margins, Dhawan has continued to invest, acquiring shares even after the RBI's rejection. His increased stake is now the largest position in his diversified portfolio, valued at around Rs 2,500 crore.
The market valuation of Religare remains largely unchanged since the Burman family's open offer in September 2023, with warrants held by Dhawan also priced at Rs 235. The company's share price has shown minimal growth over the past decade, trading at a significantly higher PE ratio than industry medians.
Care Health Insurance, a key asset, reported strong growth with premiums up 37% and profits rising 59%. However, its performance appears as a loss at the consolidated group level due to accounting standards (Ind AS 117), masking its underlying commercial strength.
The situation presents a unique window for investors like Dhawan who believe in Care Health's value and see the demerger as delayed rather than abandoned. The thin institutional ownership on the register further facilitates steady accumulation of shares.
