New Delhi: Can Fin Homes has received market regulator Sebi's approval for raising up to Rs 300 crore through a 'rights issue'. In a right issue, shares are issued to existing investors based on their holdings at a pre-determined price and ratio.
The company filed its application with the Securities and Exchange Board of India (Sebi) for the proposed rights issue in September. Sebi issued its final 'observations' on the draft offer documents on December 8, according to the latest update by the capital markets regulator. Issuance of 'observations' on offer documents by Sebi is considered as a clearance to the issuer to go ahead with the share issues through routes like IPOs, FPOs and rights issue. Can Fin Homes, promoted by Canara Bank, is primarily engaged in the business of housing finance.
The company intends to utilise the net proceeds towards "augmentation of capital base", which would result in an increase in networth and enable the company "to meet future capital adequacy requirements". SBI Capital Markets is the lead manager to the issue, while Karvy Computershare is the registrar to the issue. In July, the board of Can Fin Homes had approved raising funds through a rights issue. At the end of June 30, 2014, the company had gross and net NPAs (Non-Performing Assets) of Rs 1,843.04 lakh and Rs 632.62 lakh respectively.
