We’ll become a 360-degree financial services provider, says Religare chief | The Financial Express

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

Religare’s management under the leadership of Saluja has revitalised the company and put it on a sustainability and growth path.

We’ll become a 360-degree financial services provider, says Religare chief
Saluja said the group will start businesses of asset reconstruction company (ARC), asset management company (AMC) and insurance broking, among others. (IE)

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

“We will reinitiate the business in the NBFC, Religare Finvest (RFL), where a one-time settlement will get concluded very soon. And that will be one of the big kickstarts for us. We have been laying the foundation for the business very well. We plan to start newer businesses which are synergistic,” Rashmi Saluja, executive chairperson of Religare Enterprises (REL), told FE in an interview.

REL is a diversified financial services group present across three verticals — NBFC, health insurance and retail broking. Saluja said the group will start businesses of asset reconstruction company (ARC), asset management company (AMC) and insurance broking, among others.

“We will also keep infusing money in growing our securities business, broking and insurance business. So, in the next 2-3 years we will be ensuring that all our businesses are profitable or they turn profitable. And, of course, we will create these four of five businesses,” Saluja said.

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Religare’s management under the leadership of Saluja has revitalised the company and put it on a sustainability and growth path. The financial services group has been working to address the group’s legacy problems and restore its place as a major player in the BFSI industry. The company has received approval from the stock exchanges for the de-classification of the erstwhile 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 broking business has turned 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 challenging times due to problems in its lending vertical (Religare Finvest) on account of past irregularities committed by erstwhile promoters and ex-management. “The wrongdoings led to RFL being put under the Corrective Action Plan (CAP) by RBI in January 2018 which inter-alia prohibited RFL from the expansion of credit portfolio as well as not to pay any dividends. Since then RFL has been focused on collection and recoveries to meet its repayment obligations to the lenders,” according to the company’s annual report.

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On account of the reduction in the loan asset portfolio as a result of payments, prepayments and foreclosures by the borrowers, RFL’s revenue decreased to Rs 173.59 crore in FY22 from Rs 295.57 crore in FY21. “For the NBFC, for the last three years, we have been able to return around Rs 8,000 crore to the banks. Our collection teams are ensuring that we collect the money (from customers). The group will also be putting in money to revitalise the business,” Saluja informed.

She said that combined ratios, a measure of underwriting profitability of a non-life insurance company, for Care Health Insurance stands at around 103-105%. “In some time next year, we expect to bring down the ratio 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. PE firm Kedaara Capital picked up a nearly 17% stake in the company by infusing Rs 567 crore.

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