5 banks roped in for PNB Housing Finance’s IPO
Company expects to raise about Rs2,500 crore, which will be used to increase lending, offer new products
Mumbai: PNB Housing Finance Ltd, the housing finance subsidiary of state-owned Punjab National Bank (PNB), has hired five investment banks for an initial public offering (IPO) that could see the company raise approximately Rs2,500 crore from the primary market, said three people aware of the development.
“The firm had been meeting with banks over the last couple of months and recently it has mandated five banks including JM Financial, Kotak Mahindra Capital, Morgan Stanley and JPMorgan," said one of the people, requesting anonymity as he is not authorized to speak to the media. Emails sent to PNB Housing Finance, JM Financial, Kotak Mahindra Capital and JPMorgan did not elicit any response. Morgan Stanley declined to comment.
On 20 October, Mint reported that the firm was in talks with investment banks for its IPO.
“The plan is to raise primary capital, which will help the firm grow its lending business and add new products. Both PNB and private equity fund Carlyle are as of now not looking to sell any part of their stake through the initial share sale," said the second person cited earlier, also requesting anonymity. Details are yet to be finalized as the talks are in the initial stage, he added.
PNB holds a 51% stake in the firm, which was founded in 1988 as a non-banking finance company. The rest had been with private sector financial services firm Destimoney Enterprises Pvt. Ltd, which it had acquired in 2009. In February this year, private equity firm Carlyle Group acquired Destimoney’s stake in PNB Housing.
The firm is trying to file the draft red herring prospectus with the Securities and Exchange Board of India (Sebi) by the end of the first quarter of the next calendar year, the second person said. The IPO launch will happen sometime in the next fiscal year, he said.
For fiscal 2014-15, PNB Housing reported Rs1,776.73 crore in revenue, a jump of 60% over the 1,116 crore revenue reported the previous year. In 2014-15, the firm reported a profit of 196.1 crore, compared with Rs127.4 crore in the previous year.
As on 31 March 2015, PNB Housing had an outstanding loan book of Rs16,819 crore.
So far this year, 18 firms have raised almost Rs11,000 crore through the IPO route and over 30 firms have filed their draft IPO papers with Sebi.
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