The bank expects to get ₹1,000 crore for its 30% stake in the housing finance arm, Narayanan said, speaking to reporters on Wednesday.
“Many foreign as well domestic entities have approached. Twelve serious investors have showed interest. There are many entities including other NBFCs who have shown interest,” said Narayanan, adding that the bank will sell its entire stake of 30% in Can Fin Homes.
“We are exiting fully,” he said.
Canara Bank said on 7 September that the bank seeks expressions of interest from prospective buyers to buy 30% stake in Can Fin Homes Ltd. In a notice to the exchanges, the bank said it intended to divest 3.9 lakh equity shares of the face value of Rs. 21 each.
The bank has also engaged a reputed advisory firm to carry out 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, the notice said.
In June, the bank received board approval to sell part or full stake in the housing finance company. Last year, Canara Bank had called off the move to divest its entire shareholding in housing finance subsidiary Can Fin Homes after receiving lower-than-expected price quotation.
Private equity firms like Baring Private Equity Asia, Warburg Pincus, KKR, True North, Bain Capital, Temasek and Blackstone had shown interest in the stake. Strategic investors such as Kotak Mahindra Bank, RBL Bank and HDFC Ltd were also in the race to pick up the stake. Asia-focussed buyout fund Baring and HDFC were the two contenders that had submitted binding offers.
Can Fin Homes has a pan India network of 132 branches, 20 Affordable Housing Loan Centres (AHLCs) and 20 satellite offices with a 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 ₹753.77 crore.
Canara Bank, one of the four anchor banks identified by the government, will merge with Syndicate Bank. In the first quarter of FY20, the bank reported a 17% rise in net profit on a year-on-year basis on the back of lower provision and improved asset quality.
The bank posted a net profit of ₹329.07 crore for the three months ended 30 June compared with ₹281.49 crore in the year-ago period. Profit was higher than ₹284 crore, estimated by a Bloomberg poll of 9 analysts. Its gross non-performing assets (NPAs), as a percentage of total advances, were at 11.70 % in the June quarter compared with 11.90 % in the March quarter and 13% in the year-ago period.
This article was first published on livemint.com