SEBI rejects Danny Gaekwad’s bid for competing open offer in Religare

FPJ News Service New Delhi

The Securities and Exchange Board of India (SEBI) Capital on Friday rejected Danny Gaekwad's plea seeking an exemption to make a competing open offer for a majority stake in Religare Enterprises.

With this ruling, the Burman Group’s open offer process remains on track, solidifying their acquisition bid for Religare Enterprises Ltd. The market regulator in an order stated that the price offered by Gaekwad was Rs 275 per share in the proposed open offer which was Rs 40 higher than the Burman Group's offer of Rs 235 per share. “The applicant (Danny Gaekwad Developments & Investments, Florida) has failed to demonstrate his ability to meet the financial obligation for making the competing open offer," SEBI said in its order.

SEBI also observed that the “applicant has failed to deposit Rs 600 crore, as directed by the Supreme Court of India vide its order dated February 7, 2025 read with order dated February 12, 2025, which would have shown the applicant's commitment towards making the competing open offer". In the absence of adequate proof of financial resources required for making the competing open offer, the application does not appear to be bonafide. It seems frivolous and aimed solely at hindering the open offer process, said SEBI’s whole time member Ashwani Bhatia in the order.

The regulator in its order, noted that Gaekwad's request did not qualify as an exemption under the norms since he was not seeking relief from making an open offer but rather permission to make a competing one against the Burman Group. The regulator maintained that the Burman Group’s public announcement date remained September 25, 2023, as per rules, and not January 18, 2025 as contended by Gaekwad.

The regulator also emphasised that Gaekwad had not applied for necessary regulatory approvals from SEBI, RBI, or other authorities. Even if he did, the approval process would be time-consuming, leading to uncertainty and further delaying the open offer. SEBI has also questioned the role of Gaekwad’s merchant banker, PL Capital Markets, in doing the due diligence while taking on the assignment of the competing open offer.

“The merchant banker was clueless about the credentials of Gaekwad and was found to have failed to do proper due diligence and KYC of his client before accepting the mandate, the regulator said. SEBI also highlighted that the open offer process by the Burman Group was already underway, with over 2.31 lakh shares tendered as of February 13.