PNB Housing down nearly 2%, Crisil cuts outlook on long-term ratings1 min read . Updated: 25 Feb 2020, 12:22 PM IST
- PNB Housing's fund raising ability has remained intact over the last 6-9 months
- Significant proportion of wholesale book of PNB Housing is currently under moratorium
Ratings agency CRISIL has downgraded the outlook on the long-term ratings of PNB Housing Finance to ‘AA/Stable’ from ‘AA+/Negative'. It also lowered its rating on the long-term debt instruments, bank facilities and fixed deposit programme of the non-banking financier to 'AA/FAA+' from 'AA+/FAAA'.
At 12:16 pm the shares of PNB Housing Finance fell 1.4% to ₹400.30 apiece on BSE while benchmark Sensex jumped 112 points 40,475.90.
Earlier in July 2019, CRISIL had revised the rating outlook to 'negative' due to concerns over leverage metrics, moderation in capital adequacy ratios and increased vulnerability of asset quality in the wholesale loan portfolio.
“The current downgrade in the long term rating is driven by lower than expected equity raise which will result in the correction in gearing metrics being lower than earlier envisaged. The rating action also factors in weakening of asset quality metrics due to slippages from some large developer accounts in the wholesale loan portfolio," the ratings agency said.
“PNB Housing's fund raising ability has remained intact over the last 6-9 months and it is continuing to maintain high on-balance sheet liquidity," it added.
For the third quarter ended 31 December, lender’s GNPA for the wholesale loan portfolio stood at 4.17% compared to 0.17% as on March 31, 2019.
A significant proportion of wholesale book of PNB Housing is currently under moratorium with staggered repayments. In the October-December period of the current fiscal, around 65% of the company’s wholesale loan portfolio is still in moratorium period. By March 31, 2021 additional around 40% of the book will come out of moratorium.
In terms of business, the assets under management (AUM) for PNB Housing have grown at a CAGR of around 45% from fiscal 2016 to fiscal 2019 (36% year on year) reaching ₹84,722 crore as on March 31, 2019. For nine months ended fiscal 2020, AUM growth has slowed down to an annualised growth of 2.5% reaching ₹86,297 crore.