- PNB Housing Finance has announced a fundraise of ₹4,000 crore.
- The fundraising will be led by The Carlyle Group and former HDFC Bank CEO Aditya Puri.
- Shares of PNB Housing Finance hit the 20% upper circuit, reacting to the news.
The board of non-banking lender PNB Housing Finance has approved a fundraising of ₹4,000 crore. Former HDFC Bank chief executive officer (CEO) Aditya Puri and US-based private equity firm The Carlyle Group have emerged as the leading investors.
After the fundraising, the new investors will become the promoters of the company instead of the government-owned Punjab National Bank (PNB), which owns a little over 32% stake right now.
Reacting to the news, shares of PNB Housing Finance went through the roof, hitting an upper circuit of 20% at around 10:10 am.
According to the company’s exchange filing, private equity giant The Carlyle Group, will contribute to 80% of the ₹4,000 crore capital raise. The other prominent name in the fundraise is Aditya Puri’s Salisbury Investments. Puri is the former CEO and MD of HDFC Bank, India’s largest private sector bank, which also owns the country’s largest private mortgage lender HDFC.
The company notes in its exchange filing that the primary objective of the fundraise is to augment the capital adequacy, reduce the ratio of debt to equity and fund its growth objectives in the retail lending segment.
The equity issue is priced at ₹390 per share, which is a discount of nearly 11% over the previous closing price.
This has triggered an open offer for acquisition of over 70 million shares, representing 26% of the company’s existing equity shares. The open offer price is quoted at ₹403.22 per share, which is at a discount of nearly 8% over the previous closing price.
Fundraising has been long overdue
The fundraising announcement is long overdue for the lender. Back in November 2020, the company had announced a fundraise of ₹1,800 crore via a preferential issue of shares. However, its plans were derailed as its parent Punjab National Bank was not permitted by the Reserve Bank of India to pour in the capital into its lending subsidiary.
Later, in an analyst call in April 2021, PNB Housing Finance’s CEO and MD, Hardayal Prasad, said that the company is evaluating its options.
“As you are aware that we were waiting for the capital raise with participation of PNB and ₹600 crore was earmarked since then. But after, the permission was not given. So, we have initiated the process of evaluating all options and modes for the fundraise,” said Prasad.
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