Two months after shelving its plan to sell PNB Housing Finance NSE -2.43 %, state run lender Punjab National BankNSE -2.12 % (PNB) has revived the process to divest its 33% stake in the home financier by appointing PNB Investment Services and Credit Suisse as its investor scouts.
“We have invited expressions of interest for our stake in PNB HousingNSE -3.59 % Finance and a buyer will be decided through a bidding process,” said a senior PNB executive, who did not wish to be named. “We have appointed PNB Investment Services and Credit Suisse for the process.”
The deal will likely fetch around Rs 5,200 crore to PNB. The lender is also looking to sell its stakes in ICRA, CRISILNSE -3.31 %, and BSE to raise capital and meet the regulatory norms.
Earlier, PNB and Carlyle had initiated a joint strategic sale process for the entire 66% holding. The proposed plan was shelved after a pronounced sectoral value erosion that followed a protracted liquidity crisis in para banks.
Large housing finance companies and private equity majors, including Dewan Housing Finance, Indiabulls, Kotak, Godrej and Blackstone, were among the 20 companies in the race to buy out the large stake in PNB Housing Finance Company in the earlier round.
“The interest remains in the HFC space, but concerns around asset liability mismatch, potential decline in growth, asset quality concerns, especially in construction finance and under construction housing portfolio is having impact on valuation expectations,” said Sanjay Doshi partner KPMG.
PNB Housing Finance has been expanding disbursements at more than 40% in the last few years. The company has assets under management of Rs 73,482 crore at the end of September 30, 2018. Its net non-performing loans were at 0.42% of the AUM.
PNB Renews Plan for Stake Sale in Housing Finance Arm
PNB Housing Finance has 84 branches across the North, South and West. Mortgages account for 70% of the business. On Friday, the stock ended at ? 934.60 on the BSE.
After the recent liquidity crunch, PNB Housing Finance has been borrowing longer tenor funds. Its dependence on commercial papers, which were almost at 18%, has come down to 12.5% in two months.
“The disbursements registered a growth of 20% YoY at Rs 18,172 crore vis-à-vis Rs 15,179 crore during H1 of 17-18.,” said Sanjaya Gupta, MD and CEO PNB Housing Finance, after the second quarter earnings.
The home financier was seeking to increase its “branch network in Tier-2 and Tier-3 cities”, Gupta had then said, pointing to the company’s focus on boosting the affordable-homes portfolio.
“Part of the portfolio also qualifies as priority sector lending, popularly known as PSL, which can be then sold out to banks at fairly attractive prices after they attained the minimum seasoning requirement of 12 months,” Gupta had then said.
Source: Economic Times