Canara Bank gains on stake sale in subsidiary

PSU lender Canara Bank on Friday stated that it has started inviting bids to sell 30 per cent stake in its housing finance subsidiary Can Fin Homes Ltd.

In a regulatory filing, Canara Bank said that bids have been invited through merchant bankers for sale of 3,99,30,365 equity shares of the face value of Rs. 2 each, constituting 29.99 per cent. The decision to invite bids comes just ahead of amalgamation of Syndicate Bank with Canara Bank.

The bank has mentioned that it has engaged a reputed advisory firm to carry out the legal due diligence on Can Fin Homes and submit a report that shall be shared with the prospective buyer for submitting the final binding bid document.

In June 2019, the state-owned bank had received board approval to sell part or full stake in the housing finance company. It must be noted that last year, Canara Bank had withdrawn the decision to divest its entire shareholding in the subsidiary on receiving lower than expected price quotation.

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.

On Wednesday, the bank had informed the exchanges that its board will meet on September 13, 2019 to consider capital infusion of up to Rs. 9,000 crore by government of India through preferential issue of equity shares.

Shares of Canara Bank had opened at Rs. 192.60 against previous close of Rs. 191.65 on the BSE. The stock had hit an intraday high of Rs. 194.10 and intraday low of Rs. 191.00. At 12:00PM, it was trading at Rs. 193.90, up 1.17 per cent on BSE.