India's Burman family said on Monday it would buy around 26% of Religare Enterprises for 21.16 billion rupees ($255 million), giving it a controlling stake in the financial services firm it is seeking to expand to better compete in a rapidly growing sector.
The company competes with other financial services firms which are also owned by wealthy Indian families, including Jio Financial Services which was spun out of Mukesh Ambani's Reliance Industries Ltd conglomerate this year.
The Burmans, who founded consumer good conglomerate Dabur India and are worth more than $7 billion according to the Forbes Asia Rich List, are already the biggest single shareholder in Religare with an around 21% stake.
They are buying 90 million shares at 235 rupees per share, the offer document shows, a sharp discount to the stock's last closing price of 271.55 rupees.
Shares in Religare fell as much as 6.9% on Monday.
"The proposed transaction is in line with our vision to create a leading financial services platform that encompasses lending, broking and health insurance services," Anand Burman, Dabur India Chairman Emeritus, said in a statement.
The Burmans reserve the right to appoint directors to Religare's board and require changes in the management structure as determined by its board, the offer document shows.
Religare currently runs provides loans to small and mid-sized businesses, health insurance and broking services, a sector that is fast growing in India as the economy grows.
Reliance spun off Jio Financial Services earlier this year to better compete with family-controlled Bajaj Finance as demand for loans have increased in recent years.
"India's financial services space is still under-penetrated, and big family groups and conglomerates want a bigger piece of the pie," said Anand Dama, BFSI head at brokerage firm Emkay Global.
