In our previous coverage on Religare Enterprises (RELG IN) in Religare Enterprises: Sustained Red Flags , we highlighted the red herrings that had tainted the group’s image and valuation as a whole. In the two years i.e. F17-19, REL has witnessed a bunch of malpractices and poor asset quality, which led to a demise in the value of stock. The distressed state of affairs had almost corrupted its NBFC arm, as RBI had placed a cap on the operations. The NBFC business was also tarnished by its auditors in the last few years, having constantly been on the receiving end of qualified opinions, several of them being repeated year on year.
However, with the exit of ‘recognisable promoters’ and the entrance of the ‘new management’, REL has stepped up to clean itself, undergoing several measures to reinforce the confidence. Since most of the damage relating to the lending business is been done, and that other segments are doing better than ever including insurance IPO which just might be the savior, REL is set for a turnaround when one looks at the overall scheme of things.