3. Section 1
RELIGARE ENTERPRISES LTD – ABOUT US
One of India‟s fastest growing business groups
Promoter Group Religare Enterprises Ltd (“REL”)
Section 2
– An overview
Healthcare Financial Services REL is building an emerging markets business anchored
in India
Financial services is one of two focus areas for the Singh
Financial brothers, Founders of the Group
Hospitals Diagnostics Retail IT
Services 3.
The Founders have an established track record of three
Fortis Super Religare Dion Religare generations of successful entrepreneurship and value
Healthcare Religare Wellness Technologies Enterprises creation
Laboratories Limited
Established in 1994, the financial services business was
India‟s second India‟s leading Well Technology India‟s leading reinvigorated in 2001 with the induction of the current
Section 3
largest diagnostics established company financial services management team that has since successfully built a
healthcare company pharmacy focused on group with a leading franchise in India
services with over 175 chain with 130 software global footprint
provider; network stores across products for The Founders have invested substantial capital of over
building a pan - laboratories India financial ` 2700 cr to build the franchise; currently hold approx.
Asia healthcare and over 875 services with 70% stake
platform collection presence across
centers 11 countries REL‟s IPO (2007) was one of the most successful in the
history of the Indian stock market and was
oversubscribed 159 times (1); current market capitalisation
of ` 6500 cr (2)
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Listed Listing Unlisted Listed Listed
Market Cap: Document Market Cap: Market Cap:
` ~6500 cr Filed ` 260 cr ` ~6500 cr
(1) Source: Prime Database
(2) Market Cap as at May 27, 2011; Source: BSE
ABOUT RELIGARE GROUP
4. OUR VISION – ANCHORED IN INDIA AND BUILDING
Section 1 1
Section
A LEADING EMERGING MARKETS FINANCIAL
SERVICES BUSINESS
Section 2
1
Robust Indian growth story providing solid breadth and depth to the Integrated Indian Financial
financial services sector resulting in rapid growth of profit pools Services Platform
VISION 4.
“To be the leading emerging
markets financial services group 2
driven by innovation, delivering Emerging Markets
superior value for all Increasing weight and growing integration of emerging markets as
Investment Banking
Section 3
drivers of global economic growth
stakeholders globally” Platform
3
Opportunity to create value by building a multi-boutique asset
Global Asset Management
management platform providing access to capital and alpha in
Platform
Section 4
emerging markets
ABOUT RELIGARE GROUP
5. Section 1 1
Section
OVER THE LAST 9 YEARS WE HAVE EVOLVED
INTO A LEADING FINANCIAL SERVICES PLAYER…
4% 2%
5%
41%
16%
Broking Wealth Management Indian Asset Management
Significant Growth in
Section 2
Platform Lending Life Insurance Others
REL over the last 10 years has:
* Indicates summation of revenues of standalone business
Diversified from a pure-play
retail broking business into an
3% 2%
integrated financial services 32%
platform 67%
28%
Health Insurance
5.
Achieved leading market
position across various
Investment Banking
business verticals including
retail broking and lending
Global Asset
Section 3
Been amongst the fastest Management
growing financial services
31%
business in India Domestic Asset Domestic Asset
Management Management
69%
Developed a pan-India
footprint with presence across Life Insurance Life Insurance
566 cities and 2,163 locations
Wealth Wealth
Management Management
Made significant progress in 100%
building its emerging markets
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Lending Lending Lending
franchise
Broking Broking Broking Broking
2003 2006 2008 2010
ABOUT RELIGARE GROUP
6. Section 1 1
Section
...OFFERING ONE STOP FINANCIAL
SERVICES FRANCHISE
Religare Securities Limited
Integrated Indian Financial Services Platform
BROKING One of India‟s largest retail and commodities broking platform
Distribution across 556 cities and 1926 locations
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Over 800,000 clients; over 525,000 daily trades
Best-in-class risk management capability
AEGON Religare Life Insurance Religare Health Insurance
INSURANCE Life Health
JV with AEGON; an international life First stage approval received
insurance, pension and investment Strong banking equity partners; Union Bank of India and
company Corporation Bank 6.
Strong growth; volume doubled in Potential access to forty million customers
one year Leverage Group‟s healthcare assets
Religare Macquarie Wealth Management
WEALTH JV with Macquarie - a global provider of banking, financial, advisory, investment and funds management services
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MANAGEMENT Open architecture platform provides competitive advantage
Robust client base with significant growth in AUM of 32% CQGR over the last 5 quarters
Focus on high quality annuity based earnings
Religare Asset Management
ASSET India‟s 14th largest asset management company; AUM of ~ ` 10,500 cr
MANAGEMENT Three fold increase in AUM since the acquisition of Lotus Asset Management in 2008
Focus on increasing profitability by winning offshore mandates
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Religare Finvest Limited
LENDING One of India‟s largest NBFC‟s focused on SME
Capital Markets funding
Loan book of approx. ` 6800 cr
y-o-y growth of 134%
High quality portfolio
ABOUT RELIGARE GROUP
7. Section 1 1
Section
WE HAVE ALREADY ESTABLISHED OUR
PRESENCE AROUND THE GLOBE…
Established Presence
Section 2
LONDON
TURKEY
NEW YORK
7.
HONG KONG
DUBAI INDIA
Section 3
SRI LANKA SINGAPORE
BRAZIL
MELBOURNE
SOUTH AFRICA
Section 4
ABOUT RELIGARE GROUP
8. Section 1 1
Section
...THROUGH OUR INVESTMENT BANKING &
GLOBAL ASSET MANAGEMENT PLATFORM
Build a “go-to” advice and execution platform for emerging markets investors
Section 2
Emerging Markets
Investment Banking Platform
Team build out complete; over 250 professionals, 10 countries
Three strategic acquisitions executed; CJE (trading as “Aviate Asia”), BJM (US & UK) and Bartleet Mallory
Stock Brokers (Sri Lanka)
Stock coverage expanding rapidly; over 200 companies tracked in India and internationally
8.
Accelerated built out of distribution; over 520 empanelment including 364 global empanelment
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Global Asset Acquisition of Northgate Capital and Landmark Partners(1) - valuable assets added to the portfolio
Management Platform
AUM of over approx. ` 50,000 cr
Distribution roll-out in Japan completed
Cross leverage the global asset management platform for distributing the India centric funds to the overseas
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investors and provide global investment opportunities to the domestic investors
ABOUT RELIGARE GROUP
10. Section 1
WE HAVE ONE OF INDIA’S LARGEST OWNED
RETAIL DISTRIBUTION NETWORKS
Pan India Presence
Section 2
Cities
Locations
2092 2209
1853
1464
455 503 557 579
10.
FY08 FY09 FY10 FY11
Section 3
Broking Branch Network & Franchisees
+16%
1962
1747
1481
1273
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FY08 FY09 FY10 FY11
ABOUT RELIGARE RETAIL BROKING GROUP
11. WE HAVE DELIVERED STEADY PERFORMANCE
Section 1
OVER THE YEARS IN SPITE OF CHANGE
IN CYCLES
Significant growth in No.
Strategic Highlights Broking Revenues (` Cr) +185% of Customers +1,455%
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Commodities Commodities
Despite falling yields, due to change in volume mix 442 920,621
Equities Equities
towards F&O, the broking revenue has remained
780,430
steady on the back of consistent volume growth 370
Ability to provide funding through the lending
business provides competitive advantage 155
LAS book size of ` 850 Cr as on March 31, 2011
143
Structural increase in retail penetration leading to
59,222 11.
72 140,191
secular growth
56,290
12
2,932
Leadership position in the retail segment; well
poised to exploit growth potential FY07 FY11 FY06 FY11
One of the widest distribution platforms in the
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industry
Total No of Equity Trades („000) Equity Sales & Dealing Team (#)
Tested risk management and operating platform +147% +37%
that has weathered multiple cycles
503
2,915
2,127
204
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FY06 FY11 FY06 FY11
ABOUT RELIGARE RETAIL BROKING GROUP
12. Section 1
WE ARE AMONG THE LEADING RETAIL
BROKERS IN THE COUNTRY
No of Branches & Franchisees Awards & Accolades
Section 2
Branches Franchisees
1800
500
1566
396
12.
1500
30 D&B Award for Best Broking House with Global
Presence in 2010
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No of Customers, ‘000
1004
780
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Best Commodity Broker of the Year at
628 Bloomberg UTV Financial Leadership India Best Market Analyst Award
Awards, 2011 – Zee Business
Source- D&B Survey “India‟s Leading Equity Broking Houses 2010”
ABOUT RELIGARE RETAIL BROKING GROUP
13. WE LEVERAGE OUR INSTITUTIONAL RESEARCH
Section 1
PLATFORM TO PROVIDE INSIGHTS AND MARKET
REPORTS TO OUR BUSINESS PARTNERS
Institutional Research Coverage Strength Sample Industry Research Reports
Section 2
SECTOR No. of Cos
AUTOMOBILES & ANCILLARIES 11
BANKING & SPECIALTY FINANCE 18
CAPITAL GOODS 16
CEMENT 11
CONSTRUCTION & INFRASTRUCTURE 12
CONSUMERS 16 13.
INFORMATION TECHNOLOGY 21
LOGISTICS 3
MEDIA 9
METALS 9
Technical & Derivative Research Reports
Section 3
OIL & GAS 11
PIPES 3
POWER 7
PHARMACEUTICALS 15
REAL ESTATE 12
TELECOMMUNICATIONS 8
OTHERS 3
Total 185
Section 4
Leverage our Institutional Research platform to provide market insights
Provide more than 15 research reports to Business Partners Including Technical, Intra-day,
Industry, Earnings etc.
ABOUT RELIGARE RETAIL BROKING GROUP
14. Section 1
WE OFFER OUR CLIENTS A FULL FINANCIAL
PRODUCTS SUITE
Section 2
Equity Broking Commodity Broking Currency Broking
Mutual Funds Insurance E-Gold & E-Silver 14.
Section 3
Capital Market
Systematic Investment Plans Easy Gold
Funding
Section 4
Swarn Mudra (Gold
Institutional & Retail Research
Coins)
ABOUT RELIGARE RETAIL BROKING GROUP
15. WE CONTINUE TO ADD NEWER PRODUCTS
Section 1
TO OUR SUITE TO DIVERSIFY THE OVERALL
PORTFOLIO MIX
Description
Section 2
We provide an excellent opportunity to our clients to expand into other asset classes, diversify their portfolios and use currency
Currency Trading markets to compliment their equity and commodity trading. Since its inception, the currency futures market has grown by leaps &
bounds
15.
Our wide range of services enable investors to broaden their portfolio continuum , while managing risk through transparent
Mutual Fund Service process. With our Mutual Fund Service System , an order collection system provided by National Stock Exchange, you can place
System subscription or redemption request for mutual fund units
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We provide a unique product to purchase of physical Gold in monthly installments for delivery after 1 or 2 years . The rate of gold
Easy Gold is fixed at the time of entering into the contract with Religare. Retail investors can purchase gold by paying for it over a period of
time. The investor gets pure gold bar/coins of international standard of 999 purity.
Allows purchase & sale of base and precious metals in the dematerialized form. Physical delivery available on demand at select
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E-Spot locations
ABOUT RELIGARE RETAIL BROKING GROUP
16. Section 1
WE CONTINUE INVESTING TO BUILD RELIGARE
INTO A HIGHLY RECOGNIZED BRAND
Print Media Industry Forums
Section 2
16.
Section 3
TV Ads & Commercials
Section 4
ABOUT RELIGARE RETAIL BROKING GROUP
17. Section 1
STATE-OF-THE-ART
Operations Risk Management
Section 2
17.
Account opening within 3 days Trading in mutual funds through MFSS system. The client will get margin
benefit on dematerialized MF units based on applicable hair cuts
Online account opening tracker for BP to view the real time status updation
Offer a module by which Business Partner can avail intraday limit based on
Section 3
client liquidity without calling the Risk official on near to real time basis
Instant visibility to the necessary information with respect to clients managed by
BP for client‟s ledger, net positions etc
The position of the client are uploaded on the trading application for providing
Daily updation of accrued brokerage to BP (Gross Brokerage & Net Brokerage) information to BP about client holding and MTM on holdings.
and funds payout / stock payout within 24 hours for the clients
Real time intraday trade confirmation and intraday position of all their clients on
web back office.
Intra-day funds payout for preferred clients – instant funds transfer to meet any
exigencies
Business partner can take print of the ledger statement/trade confirmation etc.
Section 4
for their client through LD diet.
ABOUT RELIGARE RETAIL BROKING GROUP
19. Section 1
WE HAVE BUILT A VERY STRONG BUSINESS
PARTNER CHANNEL OVER TIME
No. of Business Partners/Franchisees, #
Section 2
1,671
+81%
1,473
1,161
669
19.
155
FY07 FY08 FY09 FY10 FY11
Section 3
Client Base from Business Partners, #
+41% 193,242
168,371
136,672
107,341
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48,489
FY07 FY08 FY09 FY10 FY11
OUR PROPOSITION FOR BUSINESS PARTNERS
20. Section 1
WHY SHOULD YOU TIE-UP WITH RELIGARE?
Section 2
Reliability Convenience
20.
Key Value
Proposition
Section 3
for BPs
Personalization Knowledge
Section 4
OUR PROPOSITION FOR BUSINESS PARTNERS
21. Section 1
Convenience
WHY SHOULD YOU TIE-UP WITH RELIGARE?
Key Value Proposition Snapshot of our Platform/Other Services
Section 2
ODIN DIET Offline Platform
Superior technology to create enriched trading experience
Online platform – Race Lite/Pro ODIN (Developed by Financial Tech)
Offline platform – Pan country branch network
„Call N Trade‟ desk for online clients
21.
Online funds transfer through various banks. Payout to BPs within first week of the
month (More than 90% fund transfers through RTGS) Online Platform (RACE- Lite/Pro)
Multiple stocks tracking facility on a single screen
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E-contract notes & SMS confirmations of daily trades
State of the art web based back office support (Single window login)
24 X 7 Technical support incase of any system downtime Back-Office Platform LD DIET
Online portfolio tracker and fund transfer
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OUR PROPOSITION FOR BUSINESS PARTNERS
22. Section 1
WHY SHOULD YOU TIE-UP WITH RELIGARE? Knowledge
Key Value Proposition Research Reports in Circulation
Section 2
Strong research capabilities
Incisive retail research reports across multiple segments
Daily Newsletter
Technical & fundamental research led inputs
More than 15 types of reports in circulation to Business Partners. The set of reports shared
with BPs includes Daily Newsletter/Quarterly Earnings/Company Update/IPO Note/Industry 22.
Insights/Market Explorer/BSE-500 52 week low etc
Research, alerts, notifications on SMS
Weekly/Monthly/
Reinforcing client connect via „Making of an Informed Investor‟ initiative Quarterly
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Reports
Chat with Market experts
All round training & Business Partner support program
Industry/Other
Misc Reports
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OUR PROPOSITION FOR BUSINESS PARTNERS
23. Section 1
WHY SHOULD YOU TIE-UP WITH RELIGARE? Personalization
Key Value Proposition Snapshot of our Services
Section 2
Posters/Danglers/Standee/Banner/Canopy/Welcome Kit
Our Branch Managers work with Business Partners to support growth of the business
Business Partner Desks extend the required operational support to BPs
Varied Brokerage plans to suit market participants of all kinds
Regular reward and recognition programs to motivate business partner 23.
Electronic Direct Mailers
Marketing & Branding Support (Glow sign boards/Visiting cards/Product brochures
and collaterals/Periodic seminars & investor education meet)
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Seminars/Trainings/Investor Education Meet
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OUR PROPOSITION FOR BUSINESS PARTNERS
24. Section 1
Reliability
WHY SHOULD YOU TIE-UP WITH RELIGARE?
Key Value Proposition Snapshot of our Services
Section 2
Dedicated Customer Desk & IT Support
Centralized online risk management cell-Special module by which BP
can avail intra-day limit based on client liquidity without calling to the
Risk official
Strong brand association enhances credibility
24.
Presence across 1500 locations
Dedicated desk to service Private Clients Group
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Secured Payment Gateway & Real Time Streaming
Dedicated customer desk & IT support a call away
Payment gateway & trading platform secured by VeriSign ®
Real-time streaming quotes with instant order execution & confirmation
Robust infrastructure to ensure a seamless & transparent payout
structure
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OUR PROPOSITION FOR BUSINESS PARTNERS
26. Section 1
GUIDING PRINCIPLES OF OUR PROPOSED
STRUCTURE TO BUSINESS PARTNERS
Section 2
We believe that our Business Partners/Franchisees are extremely critical stakeholders for the success of our equity &
commodity broking business
We would like to build a long term partnership with them and help them being successful in this journey
26.
The market practice of offering incentives based on only short term performance is not a sustainable model to grow this
channel and neither does it create value for our Business Partners
Our Business Partners should be an integral part of our success story
Section 3
To create a long term relationship, Business Partners should be offered shares of Religare Enterprises Limited (REL)
(without any cash consideration), hence they gradually become co-owners than just being a partner
We would like to accomplish this dream and work with our Business Partners to deliver what is takes to become co-
owners
Section 4
UNIQUE OFFER TO BUSINESS PARTNERS
27. Section 1
COMPARISON BETWEEN RSL’s UNIQUE OFFER ILLUSTRATION
V/S THE MARKET PRACTICE
Market Practice for Commissions Payout to BPs Exclusive Offer to RSL’s Business Partners
Section 2
Total Gross brokerage Income from BP Total Gross Brokerage Income from BP
Franchisor Brokerage Retention (% of Gross brokerage) RSL Brokerage Retention (% of Gross brokerage)
27.
Net Brokerage Income to Business Partner Net Brokerage Income to Business Partner during the year
Section 3
Offer Religare Ltd stocks equivalent to Net Brokerage income to RSL
in the 3rd year (post agreement)
Up to 300% of total brokerage earned by RSL through
the BP in the 3rd year of association
Section 4
Total Income to Business Partner
* Basis the defined criteria agreed on the Term Sheet
UNIQUE OFFER TO BUSINESS PARTNERS
28. Section 1
BUSINESS PARTNER COMMISSION PAYOUT ILLUSTRATION
STRUCTURE
Total Brokerage BP Payout
Section 2
Commissions Payout to BPs
Cash payout of ` 140 (3rd year
commission) + REL stocks worth 495
180 (3 * RSL payout of ` 60 for
the third year) 320
200 450
28.
150
100 105
70
Section 3
Year 1 Year 2 Year 3 Overall (in 3 Years)
Overall payout to Business Partner in 3 years can be greater than 100% of the total gross brokerage generated
Monthly payout of BP commissions to continue on cash basis
Up to 300% of total brokerage earned by RSL through BP in the 3rd year of association, subject to BP meeting his 1st & 2nd year brokerage targets
Section 4
(determined as per the SEBI guidelines)
* Basis the defined criteria agreed on the Term Sheet
UNIQUE OFFER TO BUSINESS PARTNERS
30. Section 1
PROPOSED STRUCTURE - KEY POINTS
Section 2
BPs shall have an agreed revenue sharing arrangement which will be as per the current business practice
To create a long term incentive, BP‟s will be offered shares of Religare Enterprises Limited (REL) after 3 years from the date BP moves on to RSL platform
(Start Date) for no additional cash consideration from BP. The quantum of shares offered to BP will be linked to the performance of BP for the third year from
the Start Date.
30.
At the time of enrollment of this scheme, RSL and BP will agree upon:
Gross Brokerage (GB) of BP for the 3rd year from Start Date (Benchmark GB). The Benchmark GB number will be mutually agreed upon based on the BP‟s current trailing
twelve months GB with competition
Section 3
Net Brokerage (NB) earned by RSL for the 3rd year from Start Date, which will be shared with the BP in the form of REL shares (Benchmark NB). Benchmark NB will be
calculated as per the formula below
Benchmark NB = Benchmark GB * RSL revenue share * {% of Net Brokerage earned by RSL in 3rd year from the Start Date which needs to be shared with BP in the form of
REL shares }
This minimum GB will be calculated based upon a mutually agreed % of Benchmark GB. Incase, BP don‟t earn this minimum GB in year 1&2 then BP will not be eligible for
REL shares at the end of year 3 from Start Date
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31. Section 1
CALCULATION OF THE TOTAL STOCK BENEFIT ILLUSTRATION
FOR BP…
Particulars Details Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Section 2
Gross Brokerage from Clients* In ` Lacs 50 54 58
RSL's Share of Gross Brokerage In % 30% 30% 30%
BP's Share of Gross Brokerage In % 70% 70% 70%
31.
Brokerage earnings for RSL In ` Lacs 15 16.2 17.5
Brokerage earnings for BP In ` Lacs 35 38 41
Section 3
Maximum payout due (assumed at 300%) In ` Lacs 52
Assuming a 20% rate of
Value of REL stocks held 63 76 91
growth of REL stock
Assuming a 20% rate of
Value of REL stocks held 66 82 103
growth of REL stock
Assuming a 20% rate of
Value of REL stocks held 68 89 115
growth of REL stock
Section 4
* Assuming a CAGR of 8% for Gross Brokerage
* The price of shares to be offered to BP will be based on then prevalent REL market price as determined by the SEBI ICDR guidelines (Allotment Price) at the time of issuance of shares to BP
32. Section 1
TERMS & CONDITIONS
The price of shares to be offered to BP will be based on then prevalent REL market price as determined by the SEBI ICDR
guidelines (Allotment Price) at the time of issuance of shares to BP (i.e. post 3 years from the Start Date). This is to clarify
that this Allotment Price will be used to determine the quantum of shares to be offered to BP, however BP‟s will not be
Section 2
paying this price for the shares to be issued to them
BP will not offer the services being rendered to RSL under the business partnership for a period of 2 years in the event of
the termination of this partnership contract between BP and RSL. On termination of the business partnership contract
between BP and RSL, BP, for a period of 2 year, shall not solicit business for any product or service from the clients who
were serviced by it and shall also dissociate itself from the clients referred/introduced to RSL or mapped by RSL to the BP
32.
Any tax payouts or consequences related to transfer of shares shall be borne by the BP
Section 3
Section 4
