HDFC may buy controlling stake in CanFin Homes

Housing Development Finance Corp (HDFC) is in talks to buy controlling stake in CanFin Homes (30% stake of parent Canara Bank), according to a report 
 
The company may use part of its Rs 13,000 crore that it raised to fund the stake buying.
 
If the acquisition goes through, it will be positive for CanFin Homes as it would be part of HDFC group, according to an ET report.
 
Shares of CanFin Homes closed 0.65% 459.75 higher on the BSE.
 
The divestment would act positive for the Canara bank as it would aid it to improve its capital adequacy ratio, which in turn would partly fund its future loan growth, India Infoline said.
 
India Infoline said Canara Bank’s improving asset quality, better NIM prospects and rising non-interest income bodes well for its profitability over FY17-19E.  The bank is trading at ~2.1x FY19E P/ABV. We have positive outlook on the stock.
 
CanFin Homes Ltd is a South-based (74% of business) housing finance company with Canara Bank holding 30% stake.