Just wanted to understand that the Burman family now is increasing their stake in Religare Enterprises close to 22% from the earlier 14. Market suggests that this is a vote of confidence from large shareholders. What has been your reading?
What we started two years back in fact it has got culminated and then after the OTS the strength of all the investors that has come through including Burmans that happened just lately, that 7.1% or 7.2% that they have increased.
Because it is everybody’s hard earned money and they want to put it behind an organisation like ours. There are lots of factors that they consider. One is their journey in that five years, whether the management and the board has been transparent, whether the governance has been strong enough and whether they see the true strength of the organisation reaching its potential. We have yet to reach our potential. We have a lot of scope to really go much better from here but at least the journey that we have been committing and promising we have stuck to that.
The vision of our company has been very transparent. We reach out to our shareholders. We reach out to all the strategic investors who feel that they would like to know more about us, whatever is in the public domain and that is what we have done.
We have not done anything extraordinary except that we have held on to the governance, we have held on to the compliances, and of course along with a very robust business plan which is not aggressive and yet it is not a conservative plan. So, seeing all these things and interacting with the management is what gives confidence to the shareholders.
The Burman Group may hike their stake further by an open offer, is there something which could be up for consideration?
Any shareholder who has invested in a company like us and who have increased their shareholding through market has, I am sure, done their own diligence, they have done their own analysis on how the company is performing and based on that they have secured their investment.
One of the first thing is that they want to ensure that the investment is secure and whether the investment is growing.
If you look at the journey when and how these investors got in, the shareholders got in and whether that shareholding has increased and the company has done justice to their investment. So, based on that why they have done and like us, we also see that there is potential and there is a huge potential, there is not a ceiling any time soon, all these four companies and businesses and the other businesses on the financial services that we are talking about are going to only increase the strength of the organisation.
Second is that regarding what are the further plans of Burmans or any other shareholders, I have had absolutely no discussion on this. I have not been reached on to it. As I understand that they are going to continue being a financial investor and their financial investment in the company should be secure that is our responsibility and that is not only for one shareholder if it is a large shareholder or whether a shareholder which has got much lesser stake, so my responsibility as a chairperson and the management and the board’s responsibility is to protect the shareholders’ money through the proper governance and the compliance and having a robust business plan one.
And second is that whether they would like to go ahead and have more involvement, I feel that their trust in us has been explicit and they trust the way that we are functioning is also going to be there. I am very happy to take guidance from all the shareholders at how and what it is and if there is any strategic way that they would like to help us outgrow, it is going to be a win-win situation.
And, of course, like all my shareholders are more than welcome to give their minds to us and to understand and that also helps us. But as of an open offer or actually in any other way I do not think so that is there.
And earlier you had mentioned that you were building a war chest in order to finance the growth of the subsidiaries. Can you take us through the roadmap over the next three to five years?
Funding the company we started last year in November. We funded our health insurance company. And, of course, it is doing extremely well. So, running the existing business model that we have and to achieve the EOPs, none of the companies need more money.
They are adequately funded. But as I was telling you that all the companies have proven, their management are independent, their board is independent and they come to REL by actually putting a very competitive plan to us, to the board and we totally decide very-very pragmatically and how the performance of the company is and how the management strength is to run the business and whether there has been an attrition rate or not, whether the same team is consistently working, who has been giving the business plan to achieve.
So, they have really in fact, all my companies, my biggest strength is that the employees are very satisfied and happy and there is very less or very negligible attrition in the company’s top management so that gives the strength to us that they can actually now demand and ask for the expansion money and that is where we are very strongly and very closely contemplating on, as I was saying, as per the competitive requirement of the market and based on that we do feel that the companies now deserve to expand.
They really need to now go not only organically but also the inorganic strength and acquisitions is now the next mode for which we definitely require this war chest and for the existing business and for the businesses that would be strategically creating this 360-degree financial services strength to the organisation for which we will definitely tap out and get the interested people investing in us which I feel should happen very soon.