Canara Bank sells 13.5% of home finance arm to GIC for Rs. 754 cr
State-run Canara Bank, which has been struggling to sell non-core assets to shore up its poor core capital, today sold 13.45 per cent of its stake in its home finance arm Can Fin Homes to GIC of Singapore for Rs 753.8 crore or $113 million.
The stake, amounting to 35,80,849 equity shares each valued at Rs 2,105, was picked up by Caladium Investment, an affiliate of GIC, which is Singapore's sovereign wealth fund, the bank said in an exchange filing. The sale price at Rs 2,105 a share is a 9 per cent premium to yesterday's closing price and P/BV multiple of 5.5 times as of December 2016. Leading merchant banker JM Financial advised Canara Bank on the stake sale.
Late last month, the bank had informed the exchanges that it had appointed merchant bankers to divest its stake in another unlisted arm Canbank Factors, the conclusion of which is awaited.
The Can Fin Homes counter closed at Rs 1,977.65 or up 2.11 per cent on the BSE, which closed 0.06 per cent up on a volatile trade.
Canara Bank set up Can Fin Homes in 1987, and owned 44.1 per cent in the company as of December 2016 with the rest of the stake being held by the public.
After struggling with high bad loans, Canara Bank had reported a three-fold rise in net profit at Rs 322 crore for the December quarter. The Bangalore-based lender had reported a net profit of Rs 84.9 crore for the same quarter in the previous year.
Its NPAs rose to 9.97 per cent from 5.84 per cent in the same quarter a year ago.