Shares of Canara Bank and Can Fin Homes rose after the bank said that it has published the invitation seeking expression of interest of bidders/investors to purchase stake in its housing finance unit.
Canara Bank rose 0.16% to Rs 191.95 while Can Fin Homes rose 1.60% to Rs 398. On the BSE, 14,000 shares were traded in the Canara Bank counter so far compared with average daily volumes of 5.82 lakh shares in the past two weeks. The stock hit a high of Rs 192.6 and a low of Rs 191 so far during the day.
Canara Bank said that the stake sale involves sale of 3.99 crore equity shares constituting 29.99% of the paid-up capital of Can Fin Homes. The announcement was made after market hours on Friday, 6 September 2019.
It may be recalled that Canara Bank had on 18 June 2019 announced that the board of directors of the bank has permitted to initiate the process of stake sale in part/full in Can Fin Homes, as per the disinvestment policy of the bank. Can Fin Homes operates in the housing finance sector.
In a separate announcement, the bank informed that India Ratings has placed Canara Bank's long term issuer rating of 'IND AAA' on 'Rating Watch Negative (RWN)' following the Finance Ministry's announcement dated 30 August 2019, on the proposed amalgamation of Syndicate Bank into Canara Bank.
In a press briefing on Friday, 30 August 2019, Finance Minister Nirmala Sitharaman announced that Canara bank and Syndicate Bank will be merged. The entity will be fourth largest public sector bank with business of Rs 15.20 lakh crore. The entity will have third largest branch network in India with 10,342 branches.
The scale and synergy will benefit through large cost reduction potential due to network overlaps. Similar culture will enable smooth consolidation. Cost saving and income opportunities will arise for JVs and subsidiaries.
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