PNB Housing Finance IPO subscribed 20% on Day 11 min read . Updated: 26 Oct 2016, 01:02 AM IST
PNB Housing Finance receives bids for 5.57 million equity shares against an issue size of 28.07 million at a price band of Rs750-775 per share
New Delhi: The initial public offering (IPO) of PNB Housing Finance Ltd was subscribed 20% on Tuesday, the first of the three-day offering, receiving bids for 5.57 million equity shares against an issue size of 28.07 million.
The mortgage lender’s IPO, the second largest this year after ICICI Prudential Life Insurance Co. Ltd’s offering of about Rs6,057 crore, will close on 27 October. The company has set an IPO price band of Rs750-775 per share and seeks to raise as much as Rs3,000 crore through the IPO.
As of 5.00pm on Tuesday, the institutional investor category was subscribed around 34.6%, while the non-institutional category comprising high-net-worth individuals was subscribed 7.8%. Retail investors, whose investments cannot exceed Rs2 lakh per individual, subscribed to 16.6% of at the end of day one, data showed.
Ahead of the opening of the IPO, the company also raised approximately Rs894.18 crore by selling 11.5 million equity shares to a bunch of anchor investors including private equity firm General Atlantic and Singapore’s sovereign wealth fund GIC.
The shares were allotted to the anchor investors at Rs775 per share, the top end of the Rs750 to Rs775 per share price band for the IPO.
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 financial services firm Destimoney Enterprises Pvt. Ltd in February 2015.
Post-IPO, PNB will hold about 38-39% of the issued and paid-up share capital, while Carlyle’s holding will be about 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 capital requirements.
PNB Housing Finance 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 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.