PNB Housing Finance is to raise up to Rs 2,500 crore rights issue as its board approved the final fund-raising plan on Tuesday and will come into effect from 13, April 2023.
The closing date of the issue will be 27, April 2023.
According to an exchange notification, the company will issue 29 new equity shares for every 54 shares of its existing shareholders. Earlier the housing finance board had nodded to the rights issue in March 2022.
It added the PNB will further issue fully paid-up equity shares of over Rs 9 crore each worth Rs 275 for an amount combining up to Rs 2,493.76 crore.
Meanwhile, on Wednesday, PNB traded at Rs 482.25 per share, implying the rights issue a conducted 43 per cent discount to the current market price.
The rights issue is an estimated boost for PNB’s growth needs seeking capital for business expansion. The first equity raising announcement by housing finance since its failure of the Rs 4,000 crore capital raising plan in 2021. The company had even raised capital from a clutch of investors led by the Carlyle Group however when the Securities and Exchange Board of India (SEBI) raised alarms on the pricing of the issue it eventually caused the scrapped plan.
Earlier in June 2022, the Punjab National Bank's board had approved a Rs 500 crore capital infusion into PNB Housing Finance's rights issue. While the bank had previously been stopped from providing further capital support to the housing finance company by the regulator. The current rights issue also holds the bank liable to seek the Reserve Bank of India’s final approval.
According to reports PNB Housing Finance reported a consolidated net profit of Rs 269 crore in the quarter ending 31, December compared to Rs 188.45 crore reported a year ago. A recorded 20 per cent increase in the total income of the company year-on-year to Rs 1,796.52 crore. While the company’s third quarter’s loan book stood at Rs 58,034 crore, marginally up from Rs 57,845 crore a year before that.