PNB Housing Finance looks to raise funds via rights issue in 6-8 weeks

As on March 31, 2020, public-sector lender Punjab National Bank (PNB) held a 32.65% stake in PNB Housing Finance.

By Ankur Mishra

Mortgage financier PNB Housing Finance is looking to raise funds by way of rights issue over the next two months, MD and CEO Neeraj Vyas told FE.

“We are engaged with promoters on a rights issue. It may happen in 6-8 weeks,” Vyas said.

The PNB Housing board had earlier approved raising Rs 1,700-crore capital through various means, including qualified institutional placement (QIP). However, the mode of raising funds was not finalised. “We have decided that the best option is to go for a rights issue,” Vyas said.

The company is yet to finalise the price and size of the rights issue, Vyas added.

As on March 31, 2020, public-sector lender Punjab National Bank (PNB) held a 32.65% stake in PNB Housing Finance.

Meanwhile, PNB Housing Finance has provided a moratorium to 56% of its customers by value from March to May 2020. However, the housing financier has not availed moratorium from its lender banks. “ We had sufficient liquidity, therefore there was no need to take moratorium from banks,” Vyas said, adding: “We already have Rs 10,000 crore sanctioned limit to meet any demand.”

“Approximately, 31% of customers opted for moratorium in the second phase till now, indicating a sharp drop in the customers requesting for the moratorium,” he further said.

The Reserve Bank of India (RBI) had provided a moratorium to customers for three months from March 1, which was further extended till August.

PNB Housing Finance had earlier reported a net loss of `242 crore in the March quarter due to Covid-19 provisioning of `471 crore. The company had reported a consolidated net profit of `380 crore in the same period last year.

The company took internal measures and built sufficient provisions, Vyas said. “As a result, the total provision to total asset ratio more than tripled year-on-year (y-o-y) at 2.62% as on March 31, 2020,. The capital adequacy ratio expanded by 400 basis points y-o-y to 17.98%,” he said.