PNB Housing Finance closes at 15% premium to issue price

Shares of PNB Housing Finance ended at Rs 890, up 15 per cent compared to its IPO price of Rs 775 per share. IPO is initial public offering of shares.

The shares touched a high of Rs 904 and a low of Rs 860 on the National Stock Exchange (NSE). Shares worth nearly Rs 3,500 crore of PNB Housing changed hands on the NSE and the BSE on Monday. 

At Monday’s close, PNB Housing had a market capitalisation of Rs 14,752 crore.

The mortgage finance company had raised Rs 3,000 crore from the IPO in end-October. The issue was subscribed 30 times, led by bids from institutional investors and high net worth individuals (HNIs). The retail (small investor) portion of the IPO was subscribed only 1.2 times. PNB Housing intends to utilise the IPO proceeds towards augmenting its capital base to meet company's Tier-I capital requirements for the FY17 and FY18.

Kotak Investment Banking, Bank of America Merrill Lynch, JM Financial, JPMorgan, and Morgan Stanley are the book-running lead managers for the issue.

Its managing director Sanjaya Gupta said the company will expand the branch base from tally of 46 to 85 branches in medium term. 

The average loan ticket size is higher than Indian standards and will decline, he added. PNB Housing Finance has adopted strategy to broad-base sources of raising resources. At present, 25 per cent of funds are raised from deposits, followed by commercial paper at 15 per cent and refinancing from National Housing Bank of 10 per cent.