Shares of Can Fin Homes Ltd surged as much as 5.6% in intraday trade on Wednesday after Canara Bank Tuesday said its board has approved plan to sell part or full stake in the housing finance subsidiary.
However, the Can Fin Homes stock pared gains to trade at Rs 349.10, up 1.5%, at 12:42pm on BSE, while shares of Canara Bank were trading marginally up at Rs 260.40, up 0.15%. Canara Bank said in a regulatory filing that the permission is subject to disinvestment at appropriate time depending on the market conditions and available options.
Canara Bank has revived the Can Fin Homes stake sale plans again after calling off the move last year when it received lower-than-expected price quotations. It had then expressed its intent to offload 4% stake in Can Fin Homes to bring down its holding from 30% to 26%.
Its stake sale plan that time drew interest from private equity (PE) firms like Baring Private Equity Asia, Warburg Pincus, KKR, True North, Bain Capital, Temasek and Blackstone. Strategic investors such as Kotak Mahindra Bank, RBL Bank and Housing Development Finance Corp. Ltd (HDFC) were also in the race to pick up the stake.
Can Fin Homes has a pan India network of 132 branches, 20 affordable housing loan centres (AHLCs) and 20 satellite offices with customer base of over 1.2 lakh. Canara Bank holds a 29.99% stake in the publicly listed home finance company.
Singapore sovereign wealth fund GIC Pte Ltd owns a 13.45% stake, which it had bought in March 2017 from Canara Bank for Rs 753.77 crore. Public shareholders and other institutional investors own the remaining stake in the company, which had a loan book of Rs 18,381 crore at the end of March.
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