Promoters pare holding in CanFin

Promoters holding dips by 14%

In what is being seen as a move to increase the liquidity of CanFin Homes in the open market, the promoters of the Bank have shed nearly 14 per cent during the past one year.

The promoters holding at the end of March 2005 was at 46.09 per cent of the total equity capital of CanFin Homes as against 60.08 per cent at the end of March 2004. Among the 'Indian Promoters' who have exited CanFin Homes are Canbank Financial Services, UTI DRF, one of the UTI funds. HDFC is the latest to reduce its exposure to the company.

HDFC has shed nearly 2 per cent stake in the company over the past fiscal. HDFC on Monday said that its holding in CanFin Homes is 10.01 per cent as against 12.20 per cent at the end of March 2004. HDFC announced that it has sold 4,49,259 shares aggregating to 2.1931 per cent of the share capital of the company during the period March 03, 2005 to April 26, 2005.

The shareholding of HDFC after the sale is 20,50,721 shares aggregating to 10.01 per cent of the share capital of CanFin Homes. Prior to this, HDFC had on April 26, sold 50,000 equity shares. Upto April 25, the corporation sold 3,99,259 shares of CanFin Homes amounting to 1.949 per cent of the equity of the company.

In addition to this, CanFin Homes saw its public shareholding increase substantially to 38.49 per cent by end of March 2005 from 29.96 per cent by end of March 2004. Besides the increase in public shareholding, private corporate bodies too have increased their exposure to 8.19 per cent by end of March 2005 as against 2.99 per cent at the end of March 2004.

CanFin Homes, a housing finance company and subsidiary of Canara Bank, has been diversifying its portfolio, including three new non-housing loan products it launched earlier this year. The company was targetting professionals, such as doctors and property owners for these new products, K Venkataramaiah, the company's managing director had said at the time.

Diversification, Venkataramaiah had said, had become "inevitable" to maintain profitability. The new loans will typically be for up to 10 years at 11 per cent interest. In the nine months to December, last fiscal, company had sanctioned loans worth Rs 400 crore and disbursed Rs 345 crore including disbursals of loans sanctioned the previous year.

"We aim to end the fiscal 2005 with sanctions of Rs 575 crore and disbursals of Rs 500 crore." In the next fiscal, the company aimed to boost sanctions and disbursals by 30 per cent, he said.

CanFin Homes had hired some 17 graduates to focus on marketing of its products, mostly in Bangalore, which accounted for up to 22 per cent of its business. Hyderabad and Chennai would be the other growth centres. In the coming year, the company would increase its branches to about 50.

The company had some Rs 150 crore of "unavailed sanctions" which were to be utilised by the end of fiscal 2005. From 2000, CanFin Homes has sold mortgage-backed-securities in three tranches to raise some Rs 155 crore. This amounted to some 11 per cent of the outstanding loans the company had disbursed by December 2004. The company may take a view on further securitisation, this quarter, Venkataramaiah had said.

That such securities could not be traded in India's shallow bond market meant securitisation was yet to take off in a big way in the country. The National Housing Bank, a subsidiary of the Reserve Bank of India that re-finances loans for housing finance companies was running a pilot on this, with help among others from the Asian Development Bank.

"In the long run, housing finance companies in India will also, like in the West, become pure intermediaries without owning any assets," CanFin officials had said.