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PNB Housing Finance to raise up to Rs 4,000 crore from Carlyle Group entities
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PNB Housing Finance on Monday, May 31, 2021, said that its Board has approved a fundraising proposal of up to Rs 4,000 crore, led by issuing equity shares and convertible warrants to entities affiliated to the Carlyle Group Inc
PNB Housing Finance on Monday, May 31, 2021, said that its Board has approved a fundraising proposal of up to Rs 4,000 crore, led by issuing equity shares and convertible warrants to entities affiliated to the Carlyle Group Inc.
PNB Housing, one of the largest housing finance companies in India, in a regulatory filing, said, the board has approved a capital raise of up to Rs 4,000 crore, led by entities affiliated to The Carlyle Group Inc, the company said in a regulatory filing.
It said, Pluto Investments S.a.r.l., an affiliated entity of Carlyle Asia Partners IV, L.P. and Carlyle Asia Partners V, L.P. (together, "Carlyle") has agreed to invest up to Rs 3,185 crore through a preferential allotment of equity shares and warrants, at Rs 390 per share. Existing shareholders of the Company, funds managed by Ares SSG and General Atlantic, are also participating in the capital raise. PNB will continue to be the Promoter and a key stakeholder in the Company.
The key objective of raising capital is to augment capital adequacy, reduce gearing and accelerate growth with a focus on retail housing including self-employed and affordable housing loans such as the Unnati segment. Assuming full capital infusion (including warrants) and no other change to the March 31, 2021, financials, the capital adequacy ratio of the Company as of March 31, 2021, would increase from 18.7 per cent to over 28 per cent and gearing as of March 31, 2021, will decline from 6.7x to less than 5x.
The transaction is subject to customary regulatory approvals as well as shareholder approval. Pursuant to the Securities and Exchange Board of India's Takeover Regulations, the proposed transaction will trigger a mandatory open offer by Pluto Investments S.a.r.l. for the purchase of up to 26 per cent equity shares of PNB Housing Finance from public shareholders.
As part of this transaction, Salisbury Investments Pvt. Ltd., the family investment vehicle of Aditya Puri, Senior Advisor for Carlyle in Asia and the former CEO & Managing Director of HDFC Bank, will also invest in the capital raise. Aditya Puri is expected to be nominated to the PNB Housing Finance Board as a Carlyle nominee Director in due course. Over his 26 year tenure leading HDFC Bank, Mr. Puri grew the bank into the largest private sector bank in India and has been recognized globally as one of the world's leading businessperson.
Established in 1988, PNB Housing Finance is the fourth largest housing finance company in India in terms of Loan Assets (Rs 62,255 crore as of March 31, 2021), and the second-largest in deposits (Rs 17,129 crore as of March 31, 2021). Favourable demographics, rising urbanization, lower interest rates, continued improvement in housing affordability and supportive government policies are promoting growth across the industry which is expected to continue into the near future.
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