The Hindu Business Line : GIC Housing Fin up ahead of rights issue

GIC Housing Finance on Thursday shot up ahead of final price announcement for the forthcoming rights issue. The stock finished at Rs 54.3, up 5.44 per cent on the BSE. It also recorded higher traded volumes on both BSE and NSE. Over 1.67 lakh shares changed hands on the BSE, while on the NSE the traded quantity was 1.59 lakh.

The market was expecting that the premium on the Rs 10 face value share would be around Rs 50. The company board has mentioned that the ceiling of total premium for about 2.69 crore shares (one for one) rights issue is at Rs 150 crore. In October 2004, the company had made a rights issue (two for one) at a premium of Rs 6 per share.

According to Mr C.V. Desai of CD Equisearch, who is already an investor in the counter, the stock is a value pick. "It attracts much lower PE than other housing finance stocks. The proposed enhancement of capital base would also help in boosting business expansion and growth in profits in the near future," he added.

Mr Desai including CD Equisearch and his family members now hold little less than 5 per cent stake in GIC Housing Finance.

Public holding, at present, in the stock is around 34.71 per cent, while promoters' holding is around 42 per cent.

An EGM has been scheduled for January 23 for shareholders' approval for the rights issue.