By Aditya Raghunath
Investing.com — PNB (NS:) Housing Finance Ltd (NS:) shares have had a wild ride since May 28. The stock doubled from Rs 438.05 on May 28 to Rs 881.4 on June 4. They have fallen since then and closed at Rs 742.3 on June 18. The stock ran up after the company board approved raising Rs 4,000 crore from private equity group Carlyle and a clutch of other investors via preferential allotment.
However, the stock might fall further after the Securities and Exchange Board of India (SEBI) froze the Carlyle deal calling it “ultra-vires” (against the law) of the articles of association (AOA).
SEBI has asked PNB Housing Finance to not make any allotment until the company undertakes the valuation of shares. In a letter on Saturday, PNB Housing Finance told BSE, “The Company and its Board of Directors have considered the SEBI Letter, and continue to believe that the Company has acted in compliance with all relevant applicable laws.”
On June 8, Stakeholders Empowerment Services (SES), an institutional investor advisory firm, in a report, said that the whole process was against minority/retail shareholders of the company and was ultra vires of law.
It also said that this deal would cause a loss of Rs 2,000 crore to PNB, one of the country’s largest public sector banks. It said that PNB Housing could have raised the same amount via a rights issue, and PNB could have renounced its rights entitlement to Carlyle at a market-related price.
