Can Fin Homes reports fraud of Rs 38.53 crore; stock declines 8%
Can Fin Homes stock came under selling pressure after the company informed exchanges on Tuesday that employees at its Ambala branch committed a fraud of nearly Rs 38.53 crore.
Shares of Can Fin Homes, Canara Bank's housing finance company, slipped as much as 8 per cent in Wednesday's trading session to touch the day's low of Rs 787.25 apiece on the BSE. The stock came under selling pressure after the company informed exchanges on Tuesday that employees at its Ambala branch committed a fraud of nearly Rs 38.53 crore.
At around 10:05 AM, shares of Can Fin Homes were trading 7.35 per cent lower at Rs 788.10 apiece on the BSE. The market capitalisation of the company stood at Rs 10,493.88 crore. The stock fell for the second straight session, losing 11 per cent in two days. The stock closed 9.35 per cent lower on BSE at Rs 771.1 apiece.
Can Fin Homes' internal fraud
The internal team of the company recently found that employees of its Ambala branch had committed fraud by transferring funds to different personal bank accounts and misusing the cheque signing authority.
The nature of fraud has been defined as the misappropriation of funds. According to Zee Business Managing Editor Anil Singhvi, the estimated impact is a one-time impact on profitability to the extent of the amount misappropriated but has no impact on assets or asset quality.
The persons involved in the fraud are Vishal Saxena, Vivek Bhagat, and Deepak Gupta, the company said. The estimated amount involved is Rs 38.53 crore. Can Fin Homes said that a First Information Report (FIR) has been lodged with the jurisdictional police.
Brokerage view
Morgan Stanley has maintained an overweight rating with a target price of Rs 1,000 apiece. In its report, the brokerage said that the estimated impact on FY24 profits will be 4 per cent and a 10 basis point (bps) impact could be seen on June 2023 book value. It added that this impact is likely to weigh on investor sentiment towards the stock in the near term.
What do other analysts suggest?
"I have a negative view on the stock as this is not the first time an internal fraud has taken place in the company," said Zee Business panellist Ambareesh Baliga.
Can Fin Homes share price: Past performance
So far in 2023, shares of Can Fin Homes have gained over 43 per cent against the headline index's rise of over 8 per cent.
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