PNB Housing Finance’s Rs3,000 crore IPO to hit market on 25 October

PNB Housing Finance has fixed a price band of Rs750-775 for its IPO to raise Rs3,000 crore

PNB Housing Finance IPO will open on 25 October and close on 27 October. Photo: Pradeep Gaur/Mint
PNB Housing Finance IPO will open on 25 October and close on 27 October. Photo: Pradeep Gaur/Mint

Mumbai: PNB Housing Finance Ltd on Tuesday said its Rs3,000 crore initial public offering (IPO) will open for subscription on 25 October.

The mortgage lender’s IPO, the second largest this year after ICICI Prudential Life Insurance Co.’s offering of almost Rs6,057 crore, will close on 27 October. The company has set an IPO price band of Rs750-775 per share.

Punjab National Bank (PNB) holds a 51% stake in its housing finance unit, which was founded in 1988 as a non-banking financial company. Private equity firm Carlyle Group owns the rest.

Carlyle acquired the stake from financial services firm Destimoney Enterprises Pvt. Ltd in February 2015.

Post-IPO, PNB will hold approximately 38-39% of the issued and paid-up share capital, while Carlyle’s holding will be around 37%, said Sanjaya Gupta, managing director of PNB Housing Finance Ltd.

The mortgage lender will use the proceeds to bolster its tier-I capital base in order to meet its capital requirements.

PNB Housing has 48 branches and around 800 employees across northern, western and southern regions. Forty percent of its business comes from north India, with south and west both contributing 30% each, said Gupta.

The home financier has hired Kotak Mahindra Capital Co. Ltd, DSP Merrill Lynch Ltd, JM Financial Institutional Securities Ltd, JP Morgan India Pvt. Ltd and Morgan Stanley India Co. Pvt. Ltd to manage the IPO.

According to Gupta, the company sees strong growth potential in the urban areas and the lender is already in process of increasing its branch network to tap this potential.

“While in the last five years we have grown to become the fifth largest housing finance company, we are present in only 32 locations with just 48 branches. So there is a lot of headway for growth. We are planning to open 18 new branches in six existing locations by the end of the financial year,” said Gupta.

Urban areas are still sparsely penetrated and so going ahead we will continue to tap these markets, Gupta added.

PNB Housing’s loan portfolio grew at a compounded annual growth rate of 61.76% from Rs3,969.6 crore as of 31 March 2012 to Rs27,177.2 crore as of 31 March 2016.

As of June 30, 2016, the company’s loan portfolio stood at Rs.30,900.6 crore.

In 2015-16, PNB Housing Finance disbursed loans worth Rs14,456 crore, as against a disbursement of Rs9,440 crore in the previous year. As of 31 March 2016, the lender’s loan book stood at Rs27,177 crore.

In 2015-16, the company’s gross non-performing assets stood at 0.22%.

In 2015-16, it reported Rs2,699.54 crore revenue, a jump of 51% over Rs1,780.38 crore in the previous fiscal. During the year, it reported a net profit of Rs327.56 crore, compared with Rs194.07 crore in the previous year.

So far in 2016, 21 companies have tapped the capital market through their IPOs. They have together raised about Rs19, 379.1 crore, as per data from Prime Database, a primary market tracker.

Last year, 21 firms hit the capital market to raise almost Rs13,614 crore through the IPO route, the best in five years, data from Prime Database showed.