 "Promoters set to infuse Rs 1,000 cr in PNB Housing")
PNB Housing Finance is set to see capital infusion of Rs 1,000 crore from its promoters, including Punjab National Bank. The infusion is aimed at reducing the debt-to-equity ratio and supporting business growth.
Delhi-based Punjab National Bank holds 51 per cent stake in the company. The remaining stake is held by Destimoney Enterprises, controlled by Asia-focused growth capital firm New Silk Route.
Punjab National Bank Chairman and Managing Director K R Kamath told Business Standard the bank’s board had approved the capital infusion, which would be recorded in tranches through two-three years.
As of March 31 this year, PNB Housing Finance’s debt-to-equity ratio stood at 11.1 (9.7 as on March 31 2012). At times, the ratio has touched 15. Whenever it hit 13, the housing finance company could draw money, Kamath said.
PNB Housing Finance is also planning to raise Rs 1,200 crore through non-convertible debentures (NCDs) to fund loan growth. The NCD issue has been assigned an ‘AA/positive’ rating by CRISIL. In July, the rating agency had revised its rating outlook on PNB Housing’s long-term debt instruments from ‘stable’ to ‘positive’. The revision in outlook was primarily driven by expectations of greater support from Punjab National Bank.
Capital infusion into the housing finance company would enable it to sustain the improvement seen after business process reengineering, which led to significant changes in the credit change, human resources and back-office operations.
The revamped business model has helped the company clock higher growth in its loan book. Between April 1 2010 and March 31this year, it recorded a compounded annual growth rate of 38.2 per cent.
As of March 31 2013, the company’s portfolio of loans due stood at Rs 6,620 crore. By March 31 2014, it plans to record a loan portfolio of about Rs 10,000 crore.
It plans to have a mix of 65-35 between its housing and non-housing segments.
Delhi-based Punjab National Bank holds 51 per cent stake in the company. The remaining stake is held by Destimoney Enterprises, controlled by Asia-focused growth capital firm New Silk Route.
Punjab National Bank Chairman and Managing Director K R Kamath told Business Standard the bank’s board had approved the capital infusion, which would be recorded in tranches through two-three years.
As of March 31 this year, PNB Housing Finance’s debt-to-equity ratio stood at 11.1 (9.7 as on March 31 2012). At times, the ratio has touched 15. Whenever it hit 13, the housing finance company could draw money, Kamath said.
PNB Housing Finance is also planning to raise Rs 1,200 crore through non-convertible debentures (NCDs) to fund loan growth. The NCD issue has been assigned an ‘AA/positive’ rating by CRISIL. In July, the rating agency had revised its rating outlook on PNB Housing’s long-term debt instruments from ‘stable’ to ‘positive’. The revision in outlook was primarily driven by expectations of greater support from Punjab National Bank.
Capital infusion into the housing finance company would enable it to sustain the improvement seen after business process reengineering, which led to significant changes in the credit change, human resources and back-office operations.
The revamped business model has helped the company clock higher growth in its loan book. Between April 1 2010 and March 31this year, it recorded a compounded annual growth rate of 38.2 per cent.
As of March 31 2013, the company’s portfolio of loans due stood at Rs 6,620 crore. By March 31 2014, it plans to record a loan portfolio of about Rs 10,000 crore.
It plans to have a mix of 65-35 between its housing and non-housing segments.