Why did Religare Enterprises shares fall by 6% in today’s session?

Synopsis: Finance stock slipped 5 percent after approving a demerger to separate financial services and insurance business, issuing 1:1 RFL shares to shareholders. The company also reported its Q3 results.

The shares of the company, which is a diversified financial services company with a presence all over India, operating through its subsidiaries, came into focus after it announced the demerger of its business.

With the market capitalization of Rs 7,627 crore, Religare Enterprises Ltd’s shares on Monday made a day low of Rs 244.30 per share, down by 6.2 percent from its previous day’s closing price of Rs 229  per share. The share trades at an overvalued P/E of 77.5x, way higher than the industry P/E of 26x.

What Happened

Demerger: The Boards of Religare Enterprises Limited and Religare Finvest Limited have approved a demerger to separate the group’s financial services and insurance operations into two independently listed entities. Under the scheme, REL will continue to hold its stake in Care Health Insurance Limited, which will remain the dedicated insurance arm, while the financial services business will move to RFL. 

The financial services vertical, comprising lending, broking, investment activities, and related support functions, will be transferred to Religare Finvest Limited on a going concern basis.

Shareholding Pattern Post Demerger: There will be no change in the shareholding pattern of REL under the scheme. RFL, currently a wholly owned subsidiary of REL, will issue one fully paid-up equity share of Rs 10 for every one REL share held on the record date. Post issuance, REL’s stake in RFL will be cancelled, and RFL’s shareholding will mirror REL’s pattern.

Objective of the demerger: The restructuring aims to streamline operations by creating focused entities aligned to distinct sector dynamics, enabling each business to pursue tailored strategies and attract differentiated investor interest.

Strategically, the demerger is intended to unlock shareholder value through a separate listing of the financial services arm. It also allows sharper managerial focus, clearer performance accountability, and sector-specific talent acquisition. Additionally, both entities will implement customised risk management and compliance frameworks, strengthening governance, oversight, and regulatory alignment.

Commenting on the demerger, Pratul Gupta, Chief Financial Officer of Religare Enterprises Limited, stated that the restructuring aims to create two focused, well-capitalised and agile entities with distinct mandates. He emphasised improved capital allocation efficiency, enhanced investor transparency, optimised capital structures, and broader investor participation, positioning both businesses to independently pursue long-term strategic growth opportunities.

Results Highlights

QoQ View The revenue from operations decreased by 1 percent to Rs 2,056 crore in Q3 FY26 from Rs 2,077 crore in Q2 FY26, and EBIDT decreased to Rs (94.9) crore in Q3 FY26 from Rs 67.0 crore in Q2 FY26. Accompanied by a net loss of Rs -76.5 crore in Q3 FY26 from Rs 45.9 crore profit in Q2 FY26.

YoY View: The revenue from operations grew by 23 percent to Rs 2,056 crore in Q3 FY26 from Rs 1,668 crore in Q3 FY25, and negative EBIDT increased to Rs (94.9) crore in Q3 FY26 from Rs (61.5) crore in Q3 FY25. Accompanied by a net loss of Rs 76.5 crore in Q3 FY26 from Rs (63.2) crore in Q3 FY25, resulting in a negative EPS of Rs -1.36 per share in Q3 FY26

Religare Enterprise Ltd, incorporated in 1984, is a diversified financial services company with a presence all over India, operating through its subsidiaries. The Co. provides loans to SMEs, Affordable Housing Finance, Health Insurance and Retail Broking. REL’s subsidiaries service over 11 lakh clients from over 1,275 locations having presence in more than 400 cities.

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