CRISIL Ltd has bought 26.22 lakh shares or 8.9 per cent stake in CARE Ratings Ltd in a block deal from Canara Bank, the company said on Thursday.
“The investment has been made pursuant to a bid process conducted by Canara Bank, subsequent to their request for quotation issued on June 19. This investment in the equity of CARE has no special rights and is in compliance with applicable rules and regulations,” CRISIL informed the BSE.
Suresh Pai, Treasury head at Canara Bank, had earlier confirmed to CNBC TV that the bank has sold its entire stake in the company and raised around Rs 400 crore. As of March 2017, Canara Bank held 8.9 per cent stake in CARE.
The deal led to an unprecedented surge in stock prices of CARE. CARE surged as much as 16.2 per cent, its maximum gain since its listing, and touched a high of Rs 1,660 per share — a level last seen in April. The stock got listed in December 2012.
Shares of Canara Bank also rose 3.2 per cent to Rs 335.80, while CRISIL rose 1 per cent to Rs 1,940.
“CRISIL continuously evaluates investment options as a part of its corporate strategy. This stake purchase is an investment in the excellent long term prospects of the credit rating sector in the country. The prospects for the sector are driven by the significant demand for capital investments and infrastructure financing in India over the long term, much of which should benefit the sector,” the company said.