Home / News / India /  Rights issuance of 2,500 Cr by PNB Housing to be finalized by December
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The 2,500 crore-rights issue of PNB Housing Finance, a subsidiary of the state-owned Punjab National Bank, is anticipated to be finalized by December, according to a statement released on Friday. After the rights issue, the company's promoter shareholding of Punjab National Bank would go below 30%—than its existing level of 32.57 per cent of the company's shares for the quarter ending in June 2022.

"RBI has given approval for infusion of 500 crore in PNB Housing Finance. Post rights issue, the holding of the bank would come down below 30 per cent but would be higher than 26 per cent so that bank retains promoter status," PNB Managing Director A K Goel said.

PNB Housing Finance has said in a statement that “PNB secured RBI approval to participate in the Rights Issue upto INR 500 crore in order to maintain banks shareholding at 30% or below but above 26%, and to retain status as promoter. Company received a final settlement order on 19th July 2022 whereby issues raised under the SEBI letter dated 25th June 2021 wrt preferential issue have been settled in terms of the SEBI (Settlement Proceedings) Regulations, 2018."

Goel said the rights issue process is expected to conclude by December or latest in the March quarter, according to PTI. 

As of June 30, 2022, the bank's net NPA remained 4.26 per cent of all advances, while its gross NPA reached 11.2 per cent. Regarding PNB's financial performance, Goel stated that by the end of March 2023, the bank aims to reduce its gross non-performing assets (NPAs) to a single digit and its net NPAs to 3.5%. According to him, the bank aims to increase credit growth this fiscal year to 11–12%.

“Retail, agriculture and MSME percentage in overall loan book would increase to 54 per cent from current 52.6 per cent by the end of FY23. The bank is comfortable as far as capital adequacy ratio is concerned to take care of 12 per cent loan growth," Goel said.

Still, the bank proposes to raise 12,000 crore from Tier I and Tier II bonds, he stated.

Goel informed PTI that, “operating profit is expected to witness a growth of 10-15 per cent during the current fiscal with a focus on recovery, reduction in fresh slippages and improvement in net interest income."

PNB Housing Finance's net interest income for the first quarter of the fiscal year 2022–23, which ended on June 30, 2022, dropped by 33 per cent year over year and 2 per cent quarter-over-quarter due to a decline in the corporate book, and operating expenses rose by 5 per cent year over year and decreased by 3 per cent quarter over quarter to INR 121 crore. Net Interest Margin was 2.4 per cent in Q1 FY23 as opposed to 3.2 per cent in Q1 FY22 and 2.3 per cent in Q4 FY22. Profit after Tax (PAT) declined by 3 per cent YoY and climbed by 39 per cent QoQ to INR 235 crore. Pursuant to the retail segment, the housing finance company's disbursements jumped by 96% YoY to INR 3,451 crore, while its retail loan asset climbed by 1.7% YoY and 1.1% QoQ to INR 50,295 crore.

At 3,639 crores, Gross NPA reduced by 7.4% YoY and 22.7% QoQ and in Q1 FY23, the net interest margin was 2.4 per cent, down from Q1 FY22's 3.2 per cent. In comparison to 3.3 per cent in Q1 FY22 and 3.01 per cent in Q4 FY22, the gross margin, net of acquisition costs, was 3.0 per cent in Q1 FY23. The return on asset (annualised) for the housing finance firm is 1.47 per cent, up from 1.24 per cent in FY22, and the return on equity (annualised) is 9.3 per cent, up from 8.9 per cent for FY22. 

Commenting on the performance Mr. Hardayal Prasad, Managing Director & CEO said: “The demand for real estate sector remains robust with 9-11% growth expected by ICRA in FY23. To leverage this opportunity, we continue to concentrate on the retail sector to accelerate growth. Our retail disbursement during the quarter registered 106% increase YoY. During the quarter to expand our footprints in the affordable segment, we opened 10 new Unnati locations. We continue to remain persistent towards improving its asset quality, which has led to a reduction in gross NPA by 23% QoQ to INR 3,639 crore in Q1FY23."

The shares of PNB Housing Finance Ltd closed today at 349.95 apiece, down by 0.65% from its previous close. On a YTD basis, the stock has fallen 28.68% so far in 2022. 

(With inputs from PTI)


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