PNB Housing Finance: PNB Housing Finance to issue Rs 2,000 crore NCDs on private placement basis. The company in its BSE filing said the board of directors approved issuance of non – convertible debentures aggregating up to Rs 2,000 crore on private placement basis.
The domestic housing sector is set to grow for the next five years after a lull of several years and the housing finance companies are well poised to tap this opportunity aided with sectoral reforms such as RERA and GST that have brought in the much needed transparency, PNB Housing Finance said in its annual report 2021-22.
India showed resilience and recovered quickly from the pandemic induced challenges, emerging as the fastest-growing economies in the world, Hardayal Prasad, Managing Director and CEO, PNB Housing Finance, said in his address to shareholders.
”After a lapse of several years, the residential real estate market is expected to grow for the next five years. HFCs will be able to tap the opportunity. Consumers today are more convinced about their investments and we are confident that the housing sector offers great potential,” Prasad said.
Reforms over the last few years, including the implementation of Real Estate Regulatory Authority (RERA) and the Goods and Services Tax (GST) have brought in transparency in the housing sector.
Besides, with the recent government policies and specific initiatives like the Production Linked Incentive Scheme (PLI), India is well-positioned to emerge as a manufacturing hub.
”This, in turn, will have a trickle-down impact across all the sectors and help the country emerge as a USD 5-trillion economy… As we look ahead, we feel that the Indian economy is in much better shape to tackle external shocks,” Prasad said.
Highlighting the company’s business performance during FY22, he said PNB Housing Finance disbursed 97 per cent of its total disbursements to the retail segment, in line with its retail first strategy.
”Within the retail segment, we continue to build our affordable housing portfolio. We opened 24 locations to cater to Unnati loans. With our strong distribution network, underwriting capabilities and customer service, Unnati loans are expected to play a significant role in driving our growth,” Prasad said.
Unnati is company’s dedicated vertical to cater to the affordable housing financing. ”As per our stated policy, we reduced our corporate loan book by 39 per cent during the year through sell-down and accelerated re-payments. We closed FY22 with an Asset Under Management (AUM) of Rs 65,977 crore, with the retail segment accounting for 89 per cent of AUM,” the official said.
In FY22, PNB Housing Finance disbursed Rs 11,246 crore loans, reflecting an annual growth of 8 per cent. The housing finance company said it will continue to build its affordable housing portfolio, and has opened as many as 24 locations during the year to enhance Unnati loans.
Citing a report from Crisil, the company said the real estate demand is likely to grow modestly at 5-10 per cent during FY23 to FY24. ”Considering the anticipated improvements in the macroeconomic situation, a large number of people are expected to enter the home purchase market. Crisil further expects the portfolio of NBFCs/HFCs to grow by 13-15 per cent on account of improved affordability and pent-up demand. Affordable housing is expected to grow by 15-17 per cent in FY23,” the company said citing the rating agency.
Prasad said the strategic priorities adopted in the previous financial year have become the bedrock for company’s growth in the coming years. ”We have continued to sharpen our focus on business growth and collections while accelerating digital interventions to build efficiencies. We have made steadfast progress in this direction, making the organisation future-ready.”
”While we advance in our growth journey, compliance and corporate governance remain important areas for us. We have a robust governance framework in place, helping us maintain high compliance standards,” Prasad added.
On company’s capital raise plans, he said the board approved a capital raise up to Rs 2,500 crore through rights issue, subject to necessary approvals.
PNB Housing Finance, promoted by the city-based state owned Punjab National Bank (PNB), had to abort a Rs 4,000 crore equity raise plan from a clutch of investors, including existing investor Carlyle group in FY22 as it hit the regulatory hurdles.
In the fiscal ended March 2022, company’s net interest income stood at Rs 1,868.92 crore against Rs 2,322.91 crore in FY21. Its operating profit declined 20 per cent to Rs 1,660.32 crore, while net profit reported a degrowth of 10 per cent to Rs 836.48 crore.