By Urvashi Valecha
Stock prices of Religare Health Insurance Company (RHIC) have increased by over 42.5% in the unlisted shares market after the private insurance arm of Religare Enterprises decided to sell 6.7% stake to Kedaara Capital, a private equity firm, for Rs 200 crore.
The company informed its shareholders that it will hold a meeting on March 13 to discuss the approval of the deal.
The shares of RHIC, which were trading at Rs 35-Rs 40 before February, have risen to trade at Rs 55-Rs 57 after the announcement of the private equity deal on February 5.
Rajesh Singla, founder of unlisted shares platform Planify, said a private equity firm investing is taken as a good sign. “Investors and shareholders think that if a private equity firm has invested in the market, the company is doing good. Very often, they do not even look at the valuations,” Singla added.
Kedaara Capital will be carrying forward the transaction through Trishikhar Ventures. “The company has identified M/s Kedaara Capital fund II LLP (investment parent), M/S Trishikar Ventures (jointly referred as ‘Kedaara’) to make an investment of around Rs 200 crore as primary capital and Rs 200 crore as secondary transaction with Religare Enterprises,” RHIC said in a notice to its shareholders. It will be selling 5,27,84,376 equity shares for Rs 37.89. The company was incorporated in 2012 and provides specialised insurance services to corporates as well as private individuals.
The method used for the stake sale would be preferential allotment and private placement of shares.
Currently, the promoters hold an 82.93% stake in the company. Additionally, Swarnim Multiventures, Union Bank of India and Corporation Bank are other majority shareholders in the company. The company reported a profit of Rs 56.92 crore and a revenue of Rs 1,843.27 crore for FY19.