Why SEBI Rejected Danny Gaekwad’s Plea for a Religare Open Offer?

Market regulator Securities and Exchange Board of India (Sebi) on Tuesday returned a letter by US-based entrepreneur Digvijay ‘Danny’ Gaekwad seeking permission to make a “competing open offer” for an equity stake in Religare Enterprises (REL).

Share price of Religare Enterprises was trading higher by 0.78% as of 2:20 PM on January 29, 2025. 

Religare Enterprises shared SEBI’s response with the stock exchanges, clarifying that Gaekwad’s proposal to acquire 55% of REL at ₹275 per share was not processed. SEBI stated, “The letters submitted by Digvijay Laxmansinh Gaekwad are being returned since the same is not an exemption application in terms of Regulation 11 of SEBI (SAST) Regulations, 2011.”

Why Did SEBI Reject Gaekwad’s Offer?

According to reports, SEBI did not accept Gaekwad’s offer for the following reasons:

1. Failure to Meet Timelines: SEBI’s takeover code stipulates a 15-day window for a competing offer from the date of the initial public announcement. Gaekwad’s proposal came after this period had expired.
2. Non-Adherence to the Required Process: The competing offer was not backed by an investment banker, which is a key regulatory requirement.

Gaekwad made his counteroffer of ₹275 per share in cash on Friday evening, just two days before the open offer of ₹235 per share by the Burman family commenced on Monday. This last-minute proposal failed to align with SEBI’s takeover code, which mandates adherence to a strict procedural framework.

Burman Family’s Response

The Burman family, which made the initial open offer on October 4, 2023, claimed that Gaekwad’s competing bid fell outside the regulatory window. Their statement clarified: “In his correspondence, he has only made a Request for Permission to the Sebi seeking their permission to make a competing open offer. Gaekwad had to make the competing offer, if at all, within 15 days from the date of public statement, which was made by the Burman Group on October 4, 2023, but he did not do so.”

This argument reinforced SEBI’s stance that Gaekwad’s request did not comply with the stipulated time-sensitive requirements.

Gaekwad’s Business Background

Danny Gaekwad is the founder of Nextgen Digital Solutions (NDS), a Microsoft Gold Partner with operations in India. NDS specialises in providing end-to-end IT solutions for small and medium-sized businesses, offering services that were traditionally accessible only to Fortune 300 companies.

Despite his strong business credentials, Gaekwad’s failure to follow SEBI’s regulatory process led to the rejection of his plea for a competing open offer for Religare Enterprises.

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