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PNB unlikely to subscribe to fresh equity expansion of its housing subsidiary PNB Housing

KOLKATA: Punjab National Bank is unlikely to subscribe to the fresh equity expansion of its housing subsidiary PNB Housing while Carlyle Group is keen to expand its investment, sources familiar with the development told ET. The housing finance company is raising Rs 2000 crore equity first time in four years.

State-run PNB holds 32.66% in the company while Carlyle holds 32.25% through a group company, called Quality Investment Holdings.

General Atlantic with 9.87% interest in the housing finance lender may also subscribe to the issue, sources said. A couple of new investors may usher in.

When contacted, PNB Housing managing director Sanjaya Gupta merely said that two of the three large investors would invest. He did not share further details. PNB did not respond to queries.

It is learnt that the mortgage lender will opt for ‘limited preference’ route whereby a maximum of five investors can participate. The company has hired Kotak Mahindra Capital Co and JM Financial to manage the issue which is expected by the end of this fiscal.

Responding to queries from ET, PNB Housing said that its board had discussed the equity raising issue threadbare on October 24. “We discussed the options and further plan of action. We will have a firm capital raise plan in the next two to three weeks and post that we plan to start doing our roadshows,” the company said.

The lender’s capital to risk adjusted ratio (CRAR) improved to 15.67% at the end of September from 13.98% six months back with tier I capital being at 12.69%. Although loan disbursement slowed this year, the fresh equity will boost the company’s future growth plans.

Total loan disbursements for the quarter shrunk almost by a third to Rs 12,604 crore between April and September compared with Rs 18,172.2 crore in the same period last year. The company has cut down its corporate lending to 83% amid lesser opportunity while retail loan disbursement remained more or less same.

Last week, the company board has also approved an enabling resolution to raise Rs 10000 crore in bonds which would be done in the next six months.

It had raised $ 100 million (Rs 690 crore) from the International Finance Corporation in July through external commercial borrowing route for providing small and medium ticket housing loans.

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