Money & Banking

PNB Housing Finance in talks with overseas investor for next round of ECB fund-raise: CFO

K.R.Srivats New Delhi | Updated on December 27, 2019 Published on December 27, 2019

PNB Housing Finance Ltd (PNBHFL) is in talks with an overseas investor to raise about $75 million to $100 million via external commercial borrowing (ECB), said Kapish Jain, Chief Financial Officer (CFO).

The ECB raising is expected to happen in the January to March quarter, and there is a good possibility of PNBHFL raising much above $100 million through ECB in that quarter, given that a repeat investor (who had put money in ECB last year) has expressed keenness to invest again in ECB, Jain told BusinessLine.

Jain said that the overseas investor (a financial industry player), who is likely to invest in the ECB in the January to March quarter, has already given an in-principal nod.

It may be recalled that PNBHFL had raised $100 million from IFC and $75 million from Sumitomo Mitsui Banking Corp this fiscal.

Shaji Varghese, Executive Director and Business Head, said that the big message is that there is buoyancy in this space (ECB window for housing finance firms) and both existing and new investors are willing to invest in the ECB offerings of PNBHFL.

Varghese also said that PNBHFL, which has assets under management of about ₹90,000 crore, is eyeing loan assets growth of average 18 to 20 per cent in three years. In the last three financial years, the loan assets saw a compounded annual growth of 43 per cent.

Jain said that PNBHFL may also tap the overseas ‘masala bond’ market next fiscal once it completes the planned ₹2,000-crore equity mop-up in the January to March quarter.

“Our board had given approval to raise pure equity up to ₹2,000 crore. We have appointed bankers. It is under way. The good news is that we are not in a extreme hurry to do it, but it is definitely in the agenda of the company. We have a target that it should be done before the end of this fiscal,” said Varghese.

No fresh sanctions

Varghese also said that disbursements will take a dip this fiscal. “Given the environment, we have taken a view that we will not do wholesale disbursements — fresh approval and fresh sanctions — to developers. “We have been taking this stance since first quarter of this fiscal. We are waiting for the market to improve,” he said.

Being a company with conservative outlook and there being a lot of volatility in the developer market, PNBHFL has taken a conscious decision of not to do construction finance for some time till there is a comfort that the market has stabilised, he said.

“Incremental sanctions, no. However, we continue to do disbursements for projects that we have already committed. Mood in the company is to preserve liquidity and have a calibrated approach to growth until the time market stabilises,” said Varghese.

He also made it clear that PNBHFL was not keen on chasing topline and was looking at its place in industry pecking order as a determinant of its performance.

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Published on December 27, 2019
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