Let’s hope for that, but given how well canfin is being managed, I doubt even a big brand with small 13% stake would b able to change anything. Benefits from big name would accrue only if theirs promoter change, which is not happening. I think amongst names, HDFC would not buy but rather one of the big non housing nbfc or may be the new gen Pvt banks would be the likely candidate.
Your comment raises a good point which I have been wondering about. Whoever buys that stake from Canara bank, will they get categorised as a promoter? If that is correct, I guess they will have to make an open offer to existing non-promoters as per some SEBI rules.
Also, 13.45% could be small but they can also buy stake from Chattisgarh investments that holds around 12% (if they are interested of course). They have been invested in Canfin from sub 100 levels so they are at huge profit and this could be a good way to off load entire 12% at a good price. (Obviously they don’t want to do what catamaran did - doing a fire sale and got lesser price - Rs.1290)
I am sorry as I didn’t know that this MF bought it. But none the less point I was trying to make was that because of illiquidity it is not easy for institutions and/or Ultra HNIs to buy their desired quantity and hence they might not mind buying above floor price if they are interested in the story.
Can anyone throw some insights into this?
Offlate, in the Canfin homes website (announcements section - http://canfinhomes.com/canfinhomes.php?page=announcements), there is a “Sale Notice” announcements. Some of them were sent long ago to the defaulters and most of them are recent ones. I don’t know how to interpret it. Can anyone with knowledge on this (recovery) analyse this and let us know if we could see some spike in NPA? Thanks
Hoping this does not takes away attention from an important question by @newone above.
I was wondering that will not stake sell by Canara bank not flush the bank with cash, helping it revive credit lending. Will it not increase its B/V substantially? Does the upcoming stake sold make Canara bank more attractive ?
I guess not necessary that the buyer gets categorized as Promoter.
Would be good if above players come in, but I doubt that it will happen. Let’s see, we will know in coming days.
One also needs to think in terms of how would the NIM and Interest Spread behave going ahead. It will peak out at some point if not peaked already.
I think numbers related to such announcements would already have been factored in the results, etc. Such announcements would follow these properties already been recognized as NPA and not other way round (I am making an educated guess here, so please research on your own).
Also, NPAs shouldn’t be viewed in isolation and provisioning numbers should also be taken into account as NPA ratios can mislead due to higher provisioning. I haven’t maintained a spread sheet etc., but I normally do back of the envelope calculations and compare provisioning numbers as percentage of total income and net interest income to see if this percentage is rising. I think this number has more or less been stable or within a narrow range in last few years. That said I don’t know what is the optimum percentage for this or what is the same percentage for other players.
Canara Bank has put a release on BSE saying they have sold 13.45% of Can Fin homes to GIC, Singapore at a price of Rs2105.
What will be impact of this on Can Fin Homes?
That is good news… GIC being such a huge investment firm with over 100 billion dollar in AUM… gives confidence on the longer term prospects of CanFin Homes…
GIC also holds stakes in HDFC Bank , Bandhan Bank and Kotak Mahindra Bank… so gives a sense of the quality they look for…
Caladium Investment (wholly owned by GIC Singapore) - As you said, definitely a big and highly rated investment organization (Singapore sovereign wealth fund, that uses its forex resources to make investments).
I believe canara bank was looking for a buyer who adds strategic value to Can Fin Homes and not just an investor looking for returns. Can anyone let me know how they can add value Can fin homes (apart from providing additional capital when necessary)?
Also, do we know if this organization purchases stake in other companies for long term ? They had recently purchases stake in Capital First.Do we know some history of their previous entry / exit in other good companies and the gains they earned?
I was expecting higher valuations on the basis of other listed HF firms like Gruh (not that high but still higher than the current price). The deal at 2105 certainly puts a price cap for 5-6 months unless something drastically changes.
Could you please elaborate … didn’t get your point regarding “puts a price cap for 5-6 months”
Because these transactions happen looking at 1 yr price growth into perspective and the bidding happened, the prices are tend to be at highest valuations. Anyway I still hold and it forms 10% of my portfolio.
you want to offload a large chunk of equity and that too to a long term and passive investor ie w/o change in mgt control , what better could be than GIC !
plus you will have to leave something on the table for GIC too
who knows bidding happened or a specific choice was there
Future price will be determined by sheer growth nos NOT what some inst decided to pay for an X stake ,
anyway markets dont hv too long a memory and the very talk of stake sale was price negative every time it came up ! cheers
Cheers to Can Fin Homes phaji
Can any body please explain why CANARA BANK is selling a business which is growing @30% CAGR.
Do we have to think that they can make more than 30% CAGR?
Am I missing something?
It was a government directive for all state owned banks to get rid of non core assets, and use the funds raised to shore up their balance sheets.
Even PNB is planning to sell some stake in PNB housing.
It is amazing that Canara Bank is going to use this money to clean up its balance sheet. Its like selling your House Silver to buy some cookies which will finish off soon. Anyway good for us small investors but shows poorly how foreigners are delighted to buy our stocks, i wish LIC or any DII would have done this.
Stake buy by GIC gives confidence that Canfin is a long term story. I hope it will mature into a major financial leader.
Grandpa Buffett says if you buy things you don’t need with money you don’t
have you will have to sell things you need to pay the debt. Same story
applies to PSU banks.