PNB Housing Finance shares decline 5 pc

By: |
June 21, 2021 6:28 PM

At the NSE, it dipped 4.99 per cent to close at Rs 700.95. In a rare regulatory move, Sebi has restrained PNB Housing Finance from going ahead with shareholders' voting on the proposed Rs 4,000 crore-deal with Carlyle group and directed the company to carry out the valuation process as per the relevant legal provisions.

Downgrade to ‘sell’ from ‘buy’. We cut our earnings estimate by >10%/>20% for FY22E/FY23E.Downgrade to ‘sell’ from ‘buy’. We cut our earnings estimate by >10%/>20% for FY22E/FY23E.

Shares of PNB Housing Finance on Monday dipped 5 per cent after the Sebi restrained the company from going ahead with shareholders’ voting on the proposed Rs 4,000 crore-deal with Carlyle group. The stock declined 5 per cent to close at Rs 702.40 — its lower circuit limit — on the BSE.

At the NSE, it dipped 4.99 per cent to close at Rs 700.95. In a rare regulatory move, Sebi has restrained PNB Housing Finance from going ahead with shareholders’ voting on the proposed Rs 4,000 crore-deal with Carlyle group and directed the company to carry out the valuation process as per the relevant legal provisions.

The watchdog said the resolution regarding the deal, which was to be put for shareholders’ vote on June 22, was “ultra-vires” of the company’s Articles of Association (AoA).

The transaction, which has come under the lens of Sebi and the Reserve Bank of India (RBI) following concerns raised in certain quarters, including by a proxy advisory firm, would eventually see private equity major Carlyle group taking control of PNB Housing Finance, which is a subsidiary of Punjab National Bank.

The company’s meeting is scheduled for Tuesday (June 22) to take up the matter for approval of the shareholders.
Meanwhile, PNB Housing Finance has reached the Securities Appellate Tribunal (SAT), filing an appeal against the letter by Sebi asking it not to go ahead with its Rs 4,000-crore capital raise plan led by Carlyle group.

The company had informed stock exchanges about the Sebi letter on June 19 through a regulatory filing.

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