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Religare Enterprises is facing legal battles and regulatory intricacies. The Burman family of Dabur poses a formidable challenge, while InGovern Research Services casts a critical eye on chairperson Rashmi Saluja, urging investigations by IRDAI and SEBI. Adding to the complexity, Religare Finvest, parent to Religare Housing Finance, seeks a change in ownership by transferring its stake to Religare Enterprises. The wheels have been set in motion with a share purchase agreement inked since April 2023, yet the journey awaits the green light from regulatory authorities. Religare Housing, a subsidiary of Religare Finvest, is navigating challenges stemming from its parent company's placement under the RBI corrective action plan in 2018. The housing arm anticipates relief upon regulatory approval for the transfer of its stake to Religare Enterprises, allowing for increased market opportunities and improved liquidity. Despite facing limitations under the corrective plan, the housing division reports an uptick in disbursements during the first two quarters of the financial year, especially in the affordable housing segment, with a credit growth of 7.5-8%. Nevertheless, a ray of financial redemption emerged on March 8, 2023, as the company successfully settled a substantial one-time payment of Rs 2,178 crore with 16 lenders. Despite facing liquidity challenges, the first two quarters of the financial year show an uptick in disbursements, with a focus on the affordable housing segment. Plans for the financial year include reaching disbursals of Rs 70-80 crore. The average ticket size is expected to increase with improving market conditions. The company has 26 branches, and while there are no immediate plans for expansion, consolidation is on the agenda. Employee count stands at 280, with a focus on productivity. The loan-to-value ratio varies for property types, and the current portfolio mix is 65:35 for loan-against-property and housing loans. Gross non-performing assets (GNPA) are at 4%, with an ideal target of 1.25-1.5%. Challenges in achieving this include the informal segment’s credit risk due to limited income proofs. Despite the hurdles, the company caters to this segment due to the cost of funds Interest rates for home loans range from 13-14.5%, and the current loan book size is Rs 255 crore. The company faces a commercial dispute with banks over interest rates, but discussions are underway to resolve the issue. Financially, the company has been profitable, with last year’s profit before tax exceeding Rs 4 crore. Similar expectations are set for the current financial year, with revenue around Rs 55 crore. The CEO remains positive about the housing finance industry’s growth, anticipating minimal negative impact from marginal repo rate increases. The construction-to-group housing ratio is 40:60. In the midst of regulatory challenges and industry intricacies, Religare Housing emerges as a resilient player, navigating the complex financial landscape with a strategic vision for growth and profitability.
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