Can Fin Homes shares gain 4% as Company to consider fundraising on July 17

Shares of Can Fin Homes gained nearly 4 per cent to Rs 377.15 on the BSE on Thursday, a day after the company informed that the Board of Directors will meet on July 17 to consider fundraising.

At 11:32 am, the stock was trading 3.76 per cent higher at Rs 376.80. In comparison, the benchmark S&P BSE Sensex was ruling 0.75 per cent higher at 36,600 levels. 

In a regulatory filing, the company informed that the Board of Can Fin Homes will meet on July 17, 2020 to consider "Raising funds by way of issue of equity shares through qualified institutions placement and/or preferential issue to promoters or rights issue and/ or any other permissible securities, subject to such approvals as may be required."

The board will also consider borrowing/ raising funds by issue of on-shore and/or off-shore debt instruments including but not limited to bonds, non-convertible debentures, non-convertible subordinated debt TierII debentures, denominated in Indian currency and/or any foreign currency. CLICK TO READ PRESS RELEASE

For the quarter ended March 2020, Can Fin Homes had reported a 37.5 per cent jump in net profit at Rs 90.91 crore on a 14.2 per cent rise in total income to Rs 528.86 crore in Q4 March 2020 over Q4 March 2019.

Consolidated profit before tax (PBT) stood at Rs 118.92 crore during the period, rising 2.9 per cent from Rs 115.61 crore in the corresponding quarter of the previous fiscal. Net interest income (NII) increased 35 per cent year-on-year (YoY) to Rs 186 crore. 

"While we build in higher non-performing assets (NPAs) in FY21 and slower growth, given the external macros and the impact on the self-employed segment, growth will pick up in FY22 and expect the company to recover faster than its peers," analysts at Axis Securities said in a result review note issued on June 18. 

Lower cost of funds should aid the company in maintaining net interest margins (NIMs) while the loan mix profile skewed towards salaried segment will help in maintaining asset quality, the brokerage said. 

It remains positive on the stock given its loan book profile, stable liquidity position and robust Capital Adequacy Ratio (CAR) -22 per cent. It recommends 'BUY' with the target price of Rs 405.