Religare Enterprises rallies 7% on stake sale to Customers Bancorp

NEW DELHI: Religare Enterprises Ltd rallied over 7 per cent in mid-morning trade on Thursday, after the company in a statement said that US-based bank Customers Bancorp Inc will invest $51 million in the financial services firm.

At 10:30 a.m.; Religare Enterprises pared some of the morning gains and was trading 4 per cent higher at Rs 353.10. It had hit a low of Rs 351.75 and a high of Rs 366 in trade today.

Pennsylvania-based Customers will buy shares worth $22 million from the founders through combination of stake sale by founders and issue of share warrants and fresh shares, Religare said in a statement.

It will invest another $28 million in preferential share warrants in Religare, convertible within 18 months, and subscribe to fresh shares worth $1 million issued by Religare.

"The transaction is part of a plan by Religare's founders, billionaire brothers Malvinder and Shivinder Singh, to bring down their holding to 49 percent in order to qualify for a banking license in India," Reuters reported.