PNB sells 26% in home fin arm for Rs 79 cr

Leading public sector lender Punjab National Bank (PNB) today said it has sold 26 per cent stake in its fully-owned home loan arm, PNB Housing, to Destimoney Enterprises for Rs 79.17 crore.

"PNB has divested 26 per cent of its stake in PNB Housing Finance in favour of Destimoney Enterprises," bank Chairman and Managing Director K R Kamath told reporters here.

The 26 per cent stake works out to be 78 lakh equity shares valued at Rs 101.50 per share, aggregating to Rs 79.17 crore, he said.

Destimoney is a privately held retail financial services company based in Mumbai.

As part of the deal, Destimoney will bring in an additional amount of Rs 137 crore to the housing finance company in the form of unsecured convertible debt. The debt will get converted into equity at the rate of Rs 101.50 per share as per the capital requirement of PNB Housing over two years, Kamath said.

Total size of the deal with Destimoney will be Rs 217 crore, after Destimoney raises its stake to 49 per cent. However, PNB will retain majority share holding, he said.

Meanwhile, Kamath declined to comment on the bank's plan to merge its primary dealership arm PNB Gilts saying it is a listed company and both the company and the shareholders have to approve.

On his outlook for interest rate, Kamath said, "If there is no spurt in inflation, interest rates is going to remain stable till March."

"The rationale behind the tie-up is to gain access to expertise in the business area and align it (PNB Housing Finance) with the market," Kamath said in a reply to whether raising funds was the sole reason for the stake sale.

Destimoney has four business lines namely retail broking, distribution of financial products, wealth management and portfolio management services.