The agency has also reaffirmed the short-term rating at ‘CARE A1+’.

CARE Ratings stated that the reaffirmation continues to factor CFHL’s strong parentage, with Canara Bank as the primary shareholder holding 29.99% as on 30 September 2025.

The parent provides board level oversight, strategic guidance and shared brand franchise. Despite its modest shareholding, Canara Bank considers CFHL a strategically important entity and has reiterated its commitment to provide support while maintaining its equity stake.

Supported by its parentage and track record, CFHL enjoys strong financial flexibility, enabling it to raise funds from diversified sources at competitive rates.

The ratings also reflect CFHL’s relatively low-risk loan portfolio, with a dominant share of salaried borrowers, its continued healthy financial performance, stable profitability, strong asset quality, and adequate capitalisation levels.

These strengths outweigh credit challenges arising from high leverage, regional concentration and competitive housing finance segment.

While there no positive rating factors, there are certain elements that could lead to a negative rating action. These include weakening credit profile of Canara Bank; change in Canara Bank’s philosophy towards CFHL or announcement of stake sale; increase in gearing (total debt/net-worth) beyond 8x levels; and weakening asset quality with gross stressed assets of above 5% on a sustained basis.

Can Fin Homes is the first bank-sponsored housing finance company in India with Canara Bank holding a stake of 29.99% as on 30 September 2025. The company is engaged in providing housing finance to individuals for construction, purchase, repair and upgradation of houses. The company operates mainly in southern India with 56% of total branches in south India, with 68% total advances from southern states.

The scrip fell 2.64% to currently trade at Rs 882.60 on the BSE.