After having been compelled to call off its ₹4,000-crore capital-raise plan involving Carlyle Group and other marquee investors, PNB Housing Finance Company Ltd (PNB) is now back to the drawing board to look at capital raising capital. The housing finance company is in discussions to decide on the modalities and the ideal route for a fresh capital raise, Hardayal Prasad, Managing Director & CEO, PNBHFL, told BusinessLine.

‘Unlucky in raising capital’

“Capital raise is back on the table. At some point of time we will be announcing capital-raise plans. This company has been unlucky in raising capital and for the last two years we had been struggling to raise capital. I am confident we will be able to raise capital again”, he said.

Prasad did not want to indicate the quantum of capital that PNBHFL would look to raise or the route that will be adopted. “I cannot give you the amount. I have to first of all tell the exchanges that I am taking the proposal to the Board. Once when the Board approves then only I will know what will be the amount I will be raising.  “Given the fact that we had last time announced ₹4,000 crore and the current situation of improved overall book, one can fathom what will be the amount I will go in for. I cannot give you the exact amount. We would like to take care of sufficiency of capital — new business, growth capital, tier 1 and tier 2 capital and capital for creation of IT,” he said.

Regulatory hurdle

The route for the fresh capital raise could be one of the three — QIP, preferential allotment or rights issue, he added. It maybe recalled that the ₹4,000-crore preferential issue of PNBHFL to private equity major Carlyle and other investors had hit a regulatory hurdle last year on the aspect of pricing of the preferential issue. Market regulator SEBI had questioned the deal after it was alleged that PNBHFL was giving preferential allotment to Carlyle and other investors at a lower value than the prevailing market price. Post the PNBHFL-Carlyle deal fiasco, SEBI has now brought in changes to the pricing formula for allotment of shares under preferential issues.

Asked if the new capital-raise plan will cover aspects such as transfer of control by Punjab National Bank (PNB), Prasad said he cannot comment on this aspect. The aborted deal last year envisaged Carlyle Group taking control of PNBHFL. “ I can only tell you that PNB and Carlyle remain committed and supportive to the company. They realise that capital is required and both of them are working with us to ensure capital raise takes place in a timely manner. I cannot comment on PNB as they would want to take their own call on what they want to do,” said Prasad. Prasad also said that PNBHFL is now targeting a 15-20 per cent growth in disbursements this fiscal. “ Our cost of borrowing is down by 60 basis points. If sanctions and disbursements continue to grow the way we see it grow, we will see an uptick in the performance of the company,” he added.

Prasad also  said that PNBHFL has been transforming itself into a retail-focussed home loan provider and had taken a call to exit from corporate business. “In the last two years, we have reduced our corporate book by ₹12,000 crore, and this is one of the reasons why our overall assets under management (AUM) has gone down. Going forward, you should look at us as only a retail-focussed lender,” said Prasad. As on date, PNBHFL has corporate book of about ₹7,000 crore. For 2022-23, PNBHFL has guided for a Net Interest Margin ( NIM) of 3-3.1 per cent, keeping in view that the company is not doing any corporate loan book. In the just concluded December 2021 quarter, NIM stood at 2.7 per cent (3.2 per cent).

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