PNB shares move up 4.5% on subsidiary's IPO plan

Post-IPO, PNB will continue to hold approximately 35-37% of the issued and paid-up share capital in the company

Shares of Punjab National Bank rose 4.5% as its subsidiary PNB Housing Finance has approached the Securities and Exchange Board of India for an initial public offer (IPO) to raise Rs 2,500 crore.

The stock climbed 4.47% to Rs 119 on BSE.

On NSE, it gained 4.34% to Rs 118.90.

The leading housing finance firm, promoted by Punjab National Bank, will be using the proceeds from the share sale mainly towards augmenting its capital base and for general corporate purposes.

According to the Draft Red Herring Prospectus (DRHP), the company plans to raise up to Rs 2,500 crore through the initial share sale and a portion will be reserved for the employees.

At the end of March 2016, PNB had 51% stake in the company. Post-IPO, it will "continue to hold approximately 35-37% of the issued and paid-up share capital", according to the DRHP.