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Shares of Poonawalla Fincorp Ltd rose close to 3 percent in trade on Monday after the company announced that it will hold a board meeting on December 14 to consider selling stake in its wholly-owned subsidiary Poonawalla Housing Finance Ltd.

The board will also consider a proposal to raise funds for the parent company. Poonawala Housing Finance was formerly known as Magma Housing Finance, the erstwhile arm of Magma Fincorp, which later became Poonawala Fincorp.

The announcement confirms the CNBC-TV18 report dated November 23 that said Poonawalla Fincorp may put its housing finance arm on the block.

The CNBC-TV18 report had also said that the ask price for Poonawalla Housing Finance by the parent company is likely to be 3x the net worth of the arm, which was reported to be Rs 1,100 crore in September-end 2022.

Poonawalla Housing Finance is an RBI-registered housing finance company and is a 100 percent subsidiary of Poonawalla Fincorp. The housing finance company had assets under management (AUM) of Rs 5,612 crore as of September 2022. The subsidiary’s PAT (profit after tax) grew by 75 percent year-on-year to Rs 33 crore during the second quarter.

Poonawalla Fincorp had earlier announced its intent to raise growth capital in May 2022 for its housing business. The company had also shared intent of a possible IPO (initial public offering) of the company without alluding to any timeline.

Shares of Poonawala Fincorp are trading 2 percent higher at Rs 305.45.