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Analyst Research Report Snapshot


Religare Enterprises (RELG) - Co. Report - Dated - July 01, 2013




Axis Capital Limited


02 Jul 2013





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 Banking license aspirant – Religare Enterprises Ltd (REL) is a financial services firm offering SME lending, retail broking, institutional equities, asset management, wealth management, investment banking services, and insurance – It has a base of over 1.3 mn customers serviced from over 1,750 locations by ~5,300 employees – The Board has approved US$ 51 mn investment by Customers Bancorp Inc in June 2013 – moving a step closer to meeting RBI guidelines for new bank licenses (Bloomberg code # CUBI US Equity) – Given the Religare brand name, we believe the company is well placed to scale up volumes and garner higher share of retail business on securing banking license  Adequately capitalized with strong and professional management team in place – Religare Finvest (proposed banking vehicle): net worth of Rs 21.6 bn and CAR of 19.8% as on 31st March 2013 – Aegon Religare Life: solvency margin of 191% (against required solvency margin of 150%)  REL has been able to grow both organically and inorganically while partnering with strong names across the globe (Aegon, IFC, Invesco and Macquarie) – Best-in-class processes, technology, and infrastructure has enabled it to capture synergies across its various business line  Value unlocking from investments made over the years – NBFC: successfully raised Rs 3.5 bn from PE investors (Avigo & Jacob Ballas) in 2011 – Insurance: raised Rs 7.4 bn by divesting 26% stake in Life Insurance segment to Aegon in 2008  At CMP of Rs 338, the stock trades at 1.5x FY12 BV of Rs 228 and 1.5x FY13 BV of Rs 221 Regards, Praveen Agarwal (Executive Director – BFSI) Institutional Equity Research Axis Capital Ltd Tel.: + 91 22 4325 1102 Deepak Agrawal (VP – BFSI) Institutional Equity Research Axis Capital Ltd Tel.: +91 22 4325 1133 Namesh Chhangani (AVP – BFSI) Institutional Equity Research Axis Capital Ltd Tel.: +91 22 4325 1127

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