Central Bank of India is planning to sell its stake in its housing finance subsidiary Cent Bank Home Finance through an initial public offer in the third quarter of 2016.
The bank has a 64.4% stake in the housing finance company. Other investors in the company include: National Housing Bank with 16% stake, Unit Trust of India with 12.8% interest, and Housing & Urban Development Corporation with 6.8% stake.
Central Bank chairman Rajeev Rishi told Times of India that the bank would first expand the book of the home finance company before the listing in order to obtain a better valuation.
The auditor of Cent Bank Home Finance has reported that company’s current liabilities exceeded its current assets.
"We are growing the home loan book as part of our strategy to derisk our portfolio. Since home loans are all secured there is not much credit risk," added Rishi.