Friday, May 14

Carlyle Group, General Atlantic Singapore to pump in more money in PNB Housing Finance

KOLKATA: The Carlyle Group and General Atlantic Singapore Fund FII Pte Ltd are set to raise their investments in PNB Housing Finance, a move that may come as a major confidence booster for the non-banking financial sector that is undergoing a credit squeeze.

These marquee global investors are likely to subscribe to the Rs 2,000-crore worth of fresh issue of equity shares by PNB Housing, sources close to the development said. Varde Holdings Pte Ltd is also likely to raise its investment. Two other local investors are also in the process of subscribing to the fresh equity.

The share sale is the first by the mortgage lender promoted by Punjab National Bank since its listing in 2016, as it needs fresh equity to support growth. The lender had outstanding loan assets of Rs 76,000 crore at the end of June.

Carlyle holds 32.25% in PNB Housing through a group company, called Quality Investment Holdings. General Atlantic holds 9.87% while Varde Holdings holds 1.6% in the mortgage lender.

Their shareholding may go up if they invest more than their proportionate shareholding. The Rs 2,000-crore issue will be inclusive of premium and the final price will be finalised just ahead of the issue opening according to market rules.

PNB Housing executives declined comment on the development. Executives at Carlyle Group, General Atlantic and Varde Holdings did not comment either.

Shares of the mortgage lender with a face value of Rs 10 closed Wednesday at 638.40 on BSE.

PNB Housing has hired JM Financial and Kotak Mahindra Capital Co as merchant bankers for the issue. ET was first to report on May 6 about PNB Housing’s equity raising plan.

“The company is progressing well on its plan. The exercise is likely to be completed by mid-October,” a source in the know said.

It is learnt that the mortgage lender will opt for ‘limited preference’ route whereby a maximum of five investors can participate.

Investors’ interests in the share sale would vindicate the prospect of the Indian mortgage market on the back of growing urbanization and the rise in rural housing demand.

Mortgage to GDP ratio in India was just about 10% compared with China’s 18% and the US’ 63%. The government has lowered GST rate on under-construction property to 5% from 12% to promote housing for all.

Leave a Reply

Your email address will not be published. Required fields are marked *