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PNB's limited gains from housing finance IPO

Apart from some increase in sum-of-parts valuation, the issue will not help in augmenting the bank's capital

PNB's limited gains from housing finance IPO

The Punjab National Bank (PNB) stock was up 2.7 per cent, after news of the bank’s plan for an Initial Public Offer (IPO) of equity for subsidiary PNB Housing Finance. The move will help PNB unlock value and possibly lead to some upgrades in PNB’s target prices, as analysts start to assign some value to the subsidiary. Prior to the IPO news, most analysts were assigning negligible value to PNB’s subsidiaries and, hence, were not looking at the bank’s sum-of-the-parts valuation. Shweta Daptardar, financials analyst at KR Choksey, ascribes a value of Rs 15 a ...