PNB arm plans stake sale

PNB Housing Fin in talks with StanChart, others for strategic ties.

PNB Housing Finance, the housing finance arm of Punjab National Bank, is in talks with some companies, including Standard Chartered (StanChart), to divest up to 26 per cent stake.

"We are examining the possibility of roping in a strategic partner or private equity firm as a part of unlocking value," PNB Housing Finance Managing Director V K Khanna said.

The decision in this regard would be taken by June, he said. According to sources, Standard Chartered, along with other companies, is in talks with the housing finance firm to pick up stakes. 
 

REPORT CARD Year ended December
(Rs crore)	2006	2007	Y-o-Y (%)
Total income	106.14	159.97	50.72
Expenditure	82.45	118.17	43.32
Net profit	16.40	28.87	76.04
Total assets	1588.12	1942.10	22.29
Total advances	1451.56	1781.55	22.73
Net worth	126.02	156.60	24.27
Period for nine months Data complied by BS Research Bureau

However, there was no confirmation from PNB Housing Finance about Standard Chartered's interest in the company. PNB Housing Finance needed capital for scaling up operation, he said, adding that the fund had to come from either strategic investors or the capital market.

The company has raised about Rs 450 crore through bonds during the current financial year to fund its long-term resources.

Khanna said the company had enough capital adequacy to meet its requirement in the next financial year. However, it would require capital to meet the business expansion during 2009-10.

In addition to this, listing was also being consider as a part of raising money, Khanna added.

For the nine-month ended December 2007, the company posted a growth of 76 per cent in its net profit at Rs 28.87 crore compared with Rs 16.40 crore in the same period a year ago.

Led by the growing demand in the housing finance sector, the company's total income grew 51 per cent to Rs 159.97 crore in the nine-month period, against Rs 106.14 crore for the same period in the previous year.