Central Bank of India on Thursday sought bids from prospective merchant bankers to help manage the stake sale in its mortgage subsidiary Cent Bank Home Finance (CBHFL).
“The bank’s investment in equity shares of Cent Bank Home Finance (1,61,00,000 equity shares) is one of the strategic/non-core investments and bank intends to sell its non-core/strategic investment in Cent Bank Home Finance,” Central Bank said in a public notice. The other shareholders of CBHFL are Housing & Urban Development Corporation (Hudco), Unit Trust of India (UTI) and National Housing Bank.
As on March 31, the home financier’s net owned funds stood at Rs 111.57 crore. It had advances of Rs 1,270.79 crore and deposits worth Rs 482.33 crore. CBHFL reported a net profit of Rs 16.28 crore for 2018-19, with an earnings per share of Rs 6.51.
Central Bank of India is one of the lenders which is still facing operational curbs under the RBI’s prompt corrective action framework. It is expected to monetise more of its strategic investments during the current quarter. After its Q3FY20 results, the bank’s management had said that it aims to raise Rs 200 crore through sale of its real estate assets in Q4.
Further, it is looking to sell its entire 20% stake in Indo Zambia Bank for Rs 60 crore. Bank of India and Bank of Baroda each hold 20% stake in Indo Zambia Bank, with the rest being held by the Zambian government. Pallav Mohapatra, MD and CEO, had said, “We are in talks with Bank of Baroda and Bank of India to buy our stake in the bank.”