Construction Industry News
Punjab National Bank Housing Finance (PNB HFC) plans to raise Rs 2,500 crore in equity capital by allocating shares through rights issues to meet capital adequacy standards and support business growth.
The company's board approved the fundraising request at a meeting.
The company told media that it would disclose the issue price, rights ratio and timing in due course.
In December 2021, the company's solvency ratio (CAR) was 21.59%, with Tier I at 18.9%.
PNB HFC canceled plans for a preferential share issuance to earn Rs 4,000 crore from a group of investors led by private equity firm Carlyle in October 2021. The acquisition was called off due to lengthy lawsuits and uncertainties over approvals.
At the end of December 2021, the public lender PNB had a 32.57% stake in the HFC as promoter.
According to the media, PNB HFC's position in mobilizing cost-effective liabilities would be strengthened by raising equity, allowing for more competitive lending prices. While deleveraging has reduced financial risks, asset risk remains high.
Due to the firm's deliberate choice to shrink its wholesale portfolio, Covid-led operational disruptions and stiff competition from banks, PNB HFC's loan portfolio has declined since FY19.
From Rs 74,469 crore in March 2021 and Rs 83,346 crore in March 2020, Assets under Management (AUM) fell to Rs 66,539 crore in December 2021.
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