Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Market / Stock-market-news/  PNB Housing Finance stock closes at Rs890; 15% higher than issue price on debut
BackBack

PNB Housing Finance stock closes at Rs890; 15% higher than issue price on debut

The PNB Housing Finance stock opened at Rs863 a share and touched a high and a low of Rs902 and Rs860.05, respectively, on its market debut on Monday

In FY16, PNB Housing Finance reported a net profit of Rs327.60 crore, up 68.78% from a year ago.Premium
In FY16, PNB Housing Finance reported a net profit of Rs327.60 crore, up 68.78% from a year ago.

Mumbai: Shares of PNB Housing Finance Ltd closed 15% premium on its listing day on Monday after its issue was subscribed 29.5 times for the Rs.3,000-crore initial public offering (IPO) last week.

The stock opened at Rs863 a share or 11.35% higher and touched a high and a low of Rs.902.95 and Rs.860.05, respectively. The stock closed at Rs.890.60 on BSE, up 15% from its issue price of Rs775. India’s benchmark Sensex Index rose 0.68% to close at 27,458.99 points.

“Going forward we expect growth rates to moderate from current trajectory but still remain faster than the industry averages in the medium term. With likely improvement in spreads with the capital raising coupled with benefits of operating leverage accruing the ROAs could expand further. However, with fall in leverage ROEs could dilute in the near term. At current valuations, the stock could provide healthy returns in the medium term given the strong growth potential at its current size" said Emkay Research on 24 October said in a note to its investors.

Its arm Punjab National Bank closed at 40.25 on BSE, 6.6% from its previous close after the bank reported improvement in its, both on terms of absolute numbers and percentages, asset quality when compared to the immediate preceding quarter. Gross NPA stood at 13.63% while net NPA stood at 9.1%. It reported a net profit of 549 crore in the second quarter of the current fiscal, a fall of 11% from the 21 crore profit recorded in the corresponding year-ago period. PNB Gilds Ltd fell 0.7% to 38.40.

Its rivals, Housing Development Finance Corp Ltd fell 0.47%, LIC Housing Finance Ltd rose 1.8%, Can Fin Homes Ltd fell 0.6%, GIC Housing Finance Ltd rose 1%, Repco Home Finance Ltd fell 1%, Gruh Finance Ltd rose 1.4%, Indiabulls Housing Finance Ltd fell 0.1%,

The issue, which opened during 25-27 October, received 37.3 times subscription from institutional investor category, while the non-institutional category, comprising high networth individuals, received bids for 86.1 times the portion reserved for the category. The portion set aside for retail investors, whose investments cannot exceed Rs.2 lakh per individual, was subscribed 1.29 times.

On 25 October, the lender raised Rs894 crore from anchor investors including private equity firm General Atlantic, Kuwait Investment Authority, Singapore sovereign wealth fund GIC and insurance companies were among the 45 investors. Other names of investors are SBI Life Insurance, HDFC, Axis MF, IDFC, Franklin Templeton MF and Nomura.

The IPO was entirely a fresh sale of shares. The home finance lender will use the proceeds from the share sale mainly to augment its capital base and for general corporate purposes.

Punjab National Bank (PNB) holds a 51% stake in its housing finance unit, founded in 1988 as a non-banking financial company. Private equity firm Carlyle Group owns the rest. Carlyle acquired the stake from Destimoney Enterprises Pvt. Ltd in February 2015.

In FY16, PNB Housing reported a net profit of Rs327.60 crore, up 68.78% from a year ago. Net interest income rose 68.4% to Rs683.8 crore. Provisions jumped 111.86% to Rs.78.60 crore. Gross non-performing assets stood at 0.22% from 0.2% a year ago, while net NPA was at 0.14% from 0.07%. Total advances grew 13.7% to Rs.29,140 crore.

“Given robust advances growth, best asset quality among peers and foray in the affordable category housing finance segment, the future outlook remains favourable", said ICICI Securities in its 24 October note .

The housing finance firm 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.

PNB Housing Finance has 48 branches and around 800 employees across northern, western and southern regions. About 40% of its business comes from north India, with south and west both contributing 30% each.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 07 Nov 2016, 10:35 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App