Religare Enterprises Limited says RBI did not accede to demerger

Religare Enterprises Limited said the Reserve Bank of India did not accede to its proposed financial-services demerger on August 6, 2026, after NSE and BSE issued observation letters on July 7, 2026; RBI sent Religare Finvest Limited a similar communication on August 7.

What did RBI tell REL about the demerger?

RBI told REL that it had examined the application and that the request had not been acceded to, according to the regulator's August 6, 2026 letter cited in the company's September-quarter results notes. RFL received a similar RBI communication dated August 7, 2026. REL did not disclose the reasons for the regulator's decision or identify any condition that RBI considered unmet.

The RBI response matters because regulatory approvals were among the conditions precedent for the Scheme of Arrangement to become effective. REL and RFL said they were engaging with the regulator to provide further clarifications as required. The November 12, 2026 filing does not state that the Scheme has been withdrawn, amended or resubmitted.

What was REL planning to transfer to RFL?

REL's Board approved the Scheme on February 14, 2026, proposing to demerge its financial-services business into RFL on a going-concern basis. The business identified for transfer comprised lending, broking, investment, ancillary and support services. The Board considered recommendations and reports from its Audit & Governance Committee and Committee of Independent Directors on the same date.

The proposed transaction specifically excluded REL's insurance business, including its investment in and shareholding of Care Health Insurance Limited, or CHIL. The structure would therefore have separated the lending, broking and investment operations from the insurance holding. Whether that proposed separation can proceed in the submitted form depends on the regulatory condition that RBI has not acceded to.

The covered businesses reported different financial measures in H1 FY27. RFL reported profit after tax, or PAT, of Rs 64.5 crore, up 33% year on year, while Religare Broking Limited, or RBL, reported profit before tax, or PBT, of Rs 13 crore, up 29%. CHIL, which was excluded from the Scheme, reported gross written premium, or GWP, of Rs 6,897 crore, up 35%.

Did NSE and BSE approve REL's demerger?

NSE issued an observation letter with no objection on July 7, 2026, while BSE issued an observation letter with no adverse observations on the same date. REL had applied to both exchanges under Regulation 37 of the Securities and Exchange Board of India Listing Obligations and Disclosure Requirements Regulations, 2015, before filing the Scheme with the National Company Law Tribunal.

The exchange letters and the RBI response were separate steps in the Scheme process. NSE and BSE issued their observations on July 7, 2026, nearly one month before RBI's August 6 and August 7 communications to REL and RFL. The filing makes clear that the Scheme required all statutory and regulatory approvals, rather than exchange observations alone.

REL's disclosure gives no further detail on the contents of the RBI correspondence beyond the statement that the request was not acceded to. It also does not quantify a financial impact from the regulatory outcome in the September 30, 2026 consolidated results. The disclosed next action is engagement with RBI for any required clarification.

What is RFL doing after its CAP restrictions ended?

RFL restarted lending in November 2026 after RBI withdrew all restrictions under its Corrective Action Plan, or CAP, with immediate effect on July 23, 2025. CAP had been imposed in January 2018 and restricted RFL from expanding its credit and investment portfolios, except investments in government securities, as well as from declaring or paying dividends.

RFL opened branches in Lucknow, Kanpur and Noida in November 2026 and disbursed its first loan against property from Noida. It described itself as a multi-line retail non-banking financial company, or NBFC, offering loans against property, business and commercial loans, and used-car loans. Management said Tamil Nadu, Rajasthan and Maharashtra would follow the initial Uttar Pradesh branch openings.

RFL's Q2 FY27 PAT was Rs 49.4 crore, compared with Rs 30.8 crore in Q2 FY26. Its H1 FY27 PAT of Rs 64.5 crore was attributed to strong recoveries. The company reported net worth of about Rs 963 crore, cash and liquid investments of about Rs 660 crore, no borrowings, nil net non-performing assets and a capital-to-risk-weighted-assets ratio of 231.8%.

What remains in REL under the proposed structure?

CHIL's shareholding and insurance business were expressly retained by REL under the February 2026 Scheme. In H1 FY27, CHIL's retail-health GWP rose 44% year on year to Rs 4,358 crore, compared with 35% growth in overall GWP to Rs 6,897 crore. Its PBT increased 42% to Rs 392 crore during the same half year.

CHIL reported that its combined insurance service ratio improved by 70 basis points to 100.5% in H1 FY27. Its investment book reached Rs 12,897 crore, with a gross debt yield of 7.3%, while 95% of the debt portfolio was rated AAA or invested in government securities. These metrics concern the insurance business that was not included in the proposed RFL transfer.

REL also disclosed that CHIL has used a one-year transition forbearance for FY 2026-27 granted by the Insurance Regulatory and Development Authority of India for implementation of Indian Accounting Standard 117, or Ind AS 117. CHIL management had not determined or quantified the consequential effect on assets, liabilities, equity, income, expenses, cash flows or REL's consolidated financial results as of September 30, 2026.

Conclusion

REL's disclosed position is that its proposed transfer of lending, broking, investment and related support activities to RFL has not secured the RBI response required under the Scheme. The July 7, 2026 NSE and BSE observations remain separate exchange-stage outcomes, while RBI's August 2026 communications mean the proposal cannot become effective without resolution of the outstanding regulatory requirement.

The next development to watch is REL's and RFL's engagement with RBI and any clarification sought by the regulator. Operationally, RFL has resumed lending, opened three Uttar Pradesh branches in November 2026 and identified Tamil Nadu, Rajasthan and Maharashtra as subsequent expansion markets, while CHIL's Ind AS 117 effect remains unquantified for FY 2026-27.