Private sector lender Bandhan Bank has backed out of the race to acquire PNB Housing Finance, making it one of the major drop-outs, according to sources close to the matter.
Bandhan with about 90% weightage on microfinance in terms of loan outstanding was initially keen to acquire the Punjab National BankNSE 1.29 % promoted housing finance company as it would have allowed the three-year-old lender to diversify its portfolio.
But it backed out in the last minute and did not submit the non-binding offer, the source said.
The acquisition would also have helped Bandhan to pare promoter’s stake to 40%. Bandhan Financial Holdings, which is the promoter, currently owns 82.28% in the bank.
Bandhan Bank Managing Director Chandra Shekhar Ghosh did not respond to calls or text messages till the press time.
Canadian Pension Plan Investment Board and KKR are among those who didn’t submit the initial offer to acquire the publicly listed deposit taking housing finance company, according to reports.
The proposed sale shares assumes importance for PNB’s turnaround as it expected to garner about Rs 7,000-8,000 crore through its 33% share-sell. The government has told state-owned banks weighed by pile of non-performing assets and erosion of capital to offload non-core business.
Private equity firm Carlyle Group holds another 33% in the housing finance company and is looking to sell its stake too.
The offers are expected to value the housing mortgage lender closer to Rs 24,000 crore.
Bandhan Bank’s loan portfolio grew 52% year-on-year to Rs 32,590 crore while deposits grew 37% annually to Rs 30,703 crore at the end of June.
Bandhan’s share price fell 1.25% to Rs 613.10 Wednesday on BSE while PNB Housing dipped 0.7% to Rs 1292.35 on a day which saw Sensex rising 0.81% to 37717.96 points and the rupee recovering 50 paise to 72.19 against the dollar.
Source: Economic Times