RBI Rejects Religare Enterprises' Demerger Plan

The regulator did not disclose specific reasons for the rejection. Under the proposed scheme, REL was to retain its stake in Care Health Insurance and continue as an insurance-focused entity, while the financial services business—comprising lending, broking, investment activities, and related ancillary and support services—was to be transferred to RFL on a going-concern basis. Following the demerger, both REL and RFL were expected to be listed separately on the stock exchanges.

In February, the company's Board of Directors approved the demerger plan, and in July, it received no-objection certificates from both the NSE and BSE. Both REL and RFL had submitted applications to the RBI seeking its no-objection to the scheme. REL said it had received a letter from the central bank stating that the application had been examined and the request had not been acceded to; a similar communication was received by RFL.

REL and RFL will engage with the regulator and provide further clarifications, as may be required in this regard, the company said. As per the proposed arrangement, shareholders were to receive one share of Religare Finvest for every share held in Religare Enterprises.