PNB Housing Finance had earlier reported a 9.6% year-on-year (y-o-y) decline in its consolidated net profit to Rs 257.2 crore due to six-year low disbursements amid Covid-19.
The board of PNB Housing Finance on Wednesday approved raising Rs 1,800 crore equity capital by way of preferential or rights issue. The mortgage financier had earlier told FE that it is looking to raise capital by way of rights issue. The company had also said that modalities of the issue will be decided by the largest shareholder, Punjab National Bank (PNB). The parent bank held a 32.65% stake in PNB Housing Finance as on March 31, 2020.
“The board of directors of PNB Housing Finance at its meeting held today i.e., August 19, 2020 has approved to raise equity capital aggregating up to Rs 1,800 crore through preferential issue/rights issue,” the company said in a regulatory filing.
Shaktikanta Das, the Reserve Bank of India (RBI) Governor, had earlier said that market access for non-banking finance companies (NBFC’s) was in its best shape since the implosion of IL&FS. The borrowing cost has also come down for these lenders.
PNB Housing Finance has also planned to cut operating expenditure by 5-10% in the current fiscal. The lender had decided to vacate its office at the Bandra-Kurla Complex (BKC) in Mumbai and rationalise branches in other cities. The company will continue its focus on recovery, liquidity, sell down of the corporate book, cost rationalisation and strengthening its balance sheet.
PNB Housing Finance had earlier reported a 9.6% year-on-year (y-o-y) decline in its consolidated net profit to Rs 257.2 crore due to six-year low disbursements amid Covid-19. Total disbursements in the June quarter stood at Rs 694 crore, 90% lower y-o-y.