PNB Housing Finance IPO hit capital markets today at a price band of Rs 750-775. The company will raise Rs 3,000 crore through fresh issue of equity shares.\u00a0Kotak Investment Banking, Bank of America Merrill Lynch, JM Financial, JP Morgan and Morgan Stanley are the global coordinators and book running lead managers (BRLMs) to the issue.\u00a0The public issue will close on October 27. Below are 10 things you should know before investing in PNB Housing Finance IPO: About the company: PNB Housing Finance (PNBHF) is a subsidiary of Punjab National Bank. It is the fifth largest housing finance company (HFC) in India by loan portfolio as of September 30, 2015, with the second largest amount of deposits in a HFC in India as of March 31, 2015, according to the IMaCS report. The loan portfolio grew at a CAGR of 61.76 per cent from Rs 3,969.66 crore as of March 31, 2012 to Rs 27,177.26 crore as of March 31, 2016. As of June 30, 2016, the loan portfolio had further increased to Rs 30,900.64 crore. PNBHF has over 47 branches across the northern, western and southern regions of India and 16 processing hubs. Objects of the offer: The proceeds of the issue will be used to augment the capital base to meet the future capital requirements, improve distribution network and general corporate purpose. The listing will also enhance the visibility and brand name of the company among existing and potential customers. Strong management: Sanjay Gupta was appointed as the MD of PNB Housing Finance in 2010. Having worked with MNCs like AIG, ABN Amro Bank and HDFC Ltd, he along with the newly hired professionals from private sector has been the key behind the growth. PNB Housing Finance has delivered a phenomenal CAGR growth of around 61 per cent in loan book over FY12-16, which has resulted in 43 per cent CAGR in net profit growth. The IPO proceeds will enable the company maintaining the growth momentum albeit with a lower rate. Asset quality: Despite aggressive loan growth, the housing finance company has managed strong asset quality, with gross non-performing assets and net non-performing assets at 0.22 per cent and 0.14 per cent, respectively. Capital Adequacy: PNB Housing Finance's capital adequacy at the end of 1QFY2017 stood at 13.04 per cent and looking at the high growth, which the company has been delivering, capital raising was a must. Angel Broking believes the current fund-raising via the IPO should meet the company\u2019s capital requirement in the near term. Well Diversified: The company has a high presence in the northern part of India. However, off late PNB Housing Finance has also expanded into other geographies. North accounted for 40 per cent of the outstanding loans, while west and south accounted for 30 per cent each of the loan book in India. Based on customer profile again the loan book seems well balanced with 45 per cent of the outstanding loans to self employed persons. While salaried customers accounted for around 40 per cent of the loans, the balance 15 per cent loan was towards corporate. Risks: Volatility in interest rates, increase in NPAs on non-payment by customers in particular, self-employed customers are some of the key risks for PNB Housing Finance. Also, Indian housing finance industry is highly competitive and increased competition may lead to a relative decline in average yields and spreads. Financials: PNB Housing Finance ended FY16 with revenues of Rs 2,699 crore, up around 51.6 per cent from previous year\u2019s Rs 1,780 crore. For the year ending March 31, 2016, the company posted a net profit of Rs 327.5 crore, up around 68 per cent and total expenses rose by 47.74 per cent at Rs 2,195.2 crore. Valuation: According to Sharekhan, PNB Housing Finance is priced at price-to-earnings ratio (P\/E) of 27.2 times and price-to-book value of (P\/BV) of 4.4 times at the lower end of the price band. It will be at a P\/E of 28.1 times and P\/BV of 4.6 times at the upper end of the price band. Should you invest: PNB Housing has delivered return on equity (RoE) of 17.6 per cent on the pre issue net worth. According to Angel Broking, PNB Housing Finance is all geared up for its next leg of growth and has the potential to become a significant player in the Indian mortgage business. Looking at the quality of management, which can drive the growth, the brokerage house recommends a 'Subscribe' to the issue. Brokerage firm KR Choksey Shares and Securities has also given 'Subscribe' rating to the public offer. "The current augmentation of capital base and widening distribution network should help maintain 20 per cent annual business growth over the forthcoming periods," KR Choksey in a research note said.