Canara Bank revives plan to sell stake in housing finance arm

By Beena Parmar

  • 18 Jun 2019
Credit: 123RF.com

State-run Canara Bank said on Tuesday it has revived efforts to sell a stake in its home finance subsidiary, more than a year after calling off the divestment plan.

The bank will sell partial or full stake in Can Fin Homes Ltd at an “appropriate time depending on the market conditions and available options,” the Bengaluru-based lender informed the stock exchanges.

The bank’s divestment plan is part of its efforts to monetise its non-core assets. As part of the strategy, it had sold its stake in CARE Ratings Ltd to CRISIL Ltd in 2017. Several other state-run banks have also sold non-core assets as they reel under a pile of bad loans.

Canara Bank had shelved the plan to sell its stake in Can Fin Homes in April last year after talks with at least 12 potential suitors, including eight private equity firms, failed to make a headway due to a valuation mismatch.

Its stake sale plan had evinced interest from PE firms Baring Private Equity Asia, Warburg Pincus, KKR, True North, Bain Capital, Temasek and Blackstone. Strategic investors such as Kotak Mahindra Bank, RBL Bank and HDFC Ltd were also in the race to pick up the stake.

Media reports at the time said HDFC and Baring were the front runners to purchase Can Fin Homes.

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.