Mumbai: State-owned Canara Bank has shelved plans to divest its entire shareholding in housing finance arm CanFin Homes after receiving lower-than-expected price quotation.
"As the quote received is not in tune with the valuation, Canara Bank has decided to call off the divestment of its stake in CanFin Homes Ltd (CFHL), which was under process," the PSU lender said in a filing to stock exchanges on Saturday.
Canara Bank did not provide further details on the valuation obtained from the interested party.
In December last year, Canara Bank had announced that it would offload a four per cent stake in CFHL. After the transaction, the bank's holding in CFHL would have come down to 26 per cent.
Later, the lender informed stock exchanges that it had not accepted bids from empanelled merchant bankers and would divest its entire stake in the company.
CanFin Homes has a pan-India network of 132 branches, 20 affordable housing loan centres and 20 satellite offices with a customer base of over 1.2 lakh.
Reports say Baring Pvt Equity Ltd was one of the parties to express interest in the Canara Bank stake.
At the closing price on Wednesday, the 30 per cent stake held by Canara Bank in CanFin Homes is valued at over Rs 1,930 crore.
During the third quarter ended December 31, 2017, CHFL's fresh sanctions and disbursements rose 14 per cent and 9 per cent, respectively. Its gross non-performing assets (NPAs) were contained at 0.46 per cent compared with 0.40 per cent in the preceding quarter. Of the total loan approvals, around 91 per cent was for housing. Of this, a significant portion was to individuals with income below Rs 18 lakh.
During the third quarter, the company had recorded a profit after tax of Rs 80 crore against Rs 60 crore in the same period last year.
For 2017-18, CanFin Homes has targeted a loan book size of Rs 16,000 crore compared with Rs 13,000 crore in the preceding year. The aim is to achieve a loan book size of Rs 35,000 crore by March 2020.
Canara Bank had also considered selling stake in its asset management division - Canara Robeco Mutual Fund. However, the lender said it would not go for the stake sale because of huge growth opportunities in the sector.
