Rs 4,000-crore infusion: Aditya Puri, Carlyle Group home in on PNB Housing Finance

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June 01, 2021 3:45 AM

While Carlyle Group firm Pluto Investments has agreed to invest up to Rs 3,185 crore, Aditya Puri, through his family investment vehicle Salisbury Investments, will invest Rs 25 crore. The SSG Group and General Atlantic will also participate in the capital raise, with contributions of Rs 400 crore and Rs 390 crore, respectively, PNB Housing said.

The open offer price would be Rs 403.22 per share, the report added.

Shares of PNB Housing Finance remained locked at the upper circuit on Monday with Aditya Puri and Carlyle Group emerging as key investors in the company. The mortgage player’s board approved a fund-raise of up to Rs 4,000 crore through a preferential allotment of equity shares and warrants. The issue price of Rs 390 per share implies a discount of 25% to Monday’s closing price of Rs 525.65 per share on the BSE.

While Carlyle Group firm Pluto Investments has agreed to invest up to Rs 3,185 crore, Aditya Puri, through his family investment vehicle Salisbury Investments, will invest Rs 25 crore. The SSG Group and General Atlantic will also participate in the capital raise, with contributions of Rs 400 crore and Rs 390 crore, respectively, PNB Housing said.

Morgan Stanley expects PNB’s stake to fall from the current 32.2% to 20.3% and Carlyle’s stake to increase to 50.4% from 32.2% at present, following preferential allotment and warrant conversion. The open offer price would be Rs 403.22 per share, the report added.

The primary objective of the fund-raise is to augment the capital adequacy, reduce the debt-equity ratio and fund growth objectives in the retail lending segment. Post the transaction, the lender expects capital adequacy to increase to over 28% from 18.7%. The lender also said Aditya Puri was likely to be nominated to the firm’s board as a Carlyle nominee director.

The fund-raising by the non-bank lender has been in the offing after it announced it would mop up Rs 1,800 crore through a preferential or rights issue in November 2020. Parent Punjab National Bank (PNB), however, did not get the approval from the Reserve Bank of India to infuse capital into the subsidiary. Last week, PNB Housing Finance entered into a fresh trademark agreement with PNB, which gives the parent the right to withdraw its brand name from the mortgage lender. The new trademark agreement will be applicable if the shareholding of PNB in PNB Housing falls below 30%. FE has learned that the new trademark agreement was signed just before the capital raising as any equity raised by PNB Housing would dilute PNB’s shareholding.

PNB Housing Finance registered a net profit of Rs 127 crore during the March quarter (Q4FY21), against a net loss of Rs 242 crore in Q4FY20. The lender was able to curtail expenses by 28% year-on-year (y-o-y) to Rs 1,646 crore but total revenue declined 6% y-o-y to Rs 1,834 crore.

Aditya Puri, senior advisor for Carlyle in Asia and former MD & CEO of HDFC Bank, said, “I believe PNB Housing Finance with its enhanced capital base is very well positioned to meet the growing demand in its areas of operation. I look forward to helping the company in this exciting journey.”

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