PNB Housing hits 5% lower circuit as Sebi halts deal with Carlyle

Sebi has directed the company to undertake valuation of shares by an independent registered valuer as per the provisions of applicable laws

Shares of PNB Housing Finance were locked in the lower circuit of 5 per cent at Rs 702.40 on the BSE in Monday's session after the Securities and Exchange Board of India (Sebi) directed the company to halt its proposed Rs 4,000 crore deal with Carlyle group. The market regulator has also directed the company to undertake the valuation of shares by an independent registered valuer as per the provisions of applicable laws.

Till 10:11 am, a combined around 37,000 shares had changed hands and there were pending sell orders for 260,000 shares on the NSE and BSE combined. In comparison, the S&P BSE Sensex was down 0.53 per cent at 52,069 points.

The housing finance firm was planning to issue shares and warrants on a preferential basis to private equity firm Carlyle Group and associates, which were reported to be investing Rs 4,000 crore to acquire a controlling stake of over 50 per cent in the Delhi-based mortgage lender.

The company was to hold an extraordinary general meeting of shareholders on June 22 to consider the preferential allotment of shares and warrants. The price of each share and convertible warrant is Rs 390.

PNB Housing Finance said the company has filed an appeal before the Securities Appellate Tribunal (SAT) against the letter issued by the Sebi on June 18, 2021.

“The company and its Board of Directors have considered the Sebi Letter, and continue to believe that the company has acted in compliance with all relevant applicable laws, including the applicable pricing regulations prescribed by Sebi, and the Articles of Association of the Company, and that such Preferential Allotment is in the best interests of the company, its shareholders and all relevant stakeholders,” PNB Housing Finance said in an exchange filing today.

Also in its communication to the exchange on June 15, 2021, PNB HFC had said there was no prescribed methodology required to be followed for valuing the shares of a listed entity, except the minimum pricing formula prescribed under the Sebi Regulations.

"The formula is market-linked and the floor price is the higher of the two values determined on the basis of differing look-back periods with reference to the “relevant date” for the preferential issuance. Hence, there is no prescribed distinction between pricing and a valuation certificate. The process followed was also in line with the market practice followed by listed companies," the company had said. CLICK HERE FOR COMPANY STATEMENT