PNB Housing slips 9% in three days

PNB Housing Finance fell 1.04% to Rs 801.48, extending losses for the third day.

The stock has declined 8.99% in the past three sessions, from its recent closing high of Rs 880.65 recorded on 7 June 2021.

On 31 May 2021, the board of the housing financier approved a capital raise of up to Rs 4,000 crore, led by entities affiliated to The Carlyle Group Inc. PNB Housing will raise Rs 3200 crore through preferential equity shares and Rs 800 crore through warrants. The issue price of equity shares and warrants is fixed at Rs 390 each.

PNB Housing said that 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 31 March 2021 financials, the capital adequacy ratio of the company as of 31 March 2021 would increase from 18.7% to over 28% and gearing as of 31 March 2021 will decline from 6.7x to less than 5x.

Following the announcement, share of PNB housing hit an upper circuit of 20% at Rs 525.20 on 31 May 2021.

It surged 101.20% in six sessions to end at Rs 880.65 on the BSE on 7 June 2021, from its recent closing of Rs 437.70 recorded on 28 May 2021.

PNB Housing Finance is a deposit-accepting housing finance company, with second largest deposits outstanding within housing finance companies. The company provides housing loans to individuals for purchase, construction, repair, and upgrade of houses.

On a consolidated basis, PNB Housing reported a net profit of Rs 127 crore in Q4 FY21 compared with net loss of Rs 242 crore in Q4 FY20. Total income fell 6% to Rs 1,833.90 crore in Q4 FY21 over Q4 FY20.

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