PNB Housing Finance stock plummets 18% on MD & CEO Girish Kousgi exit

Shares of PNB Housing Finance on Friday plummeted 18 per cent to close at ₹808.05 on the BSE after the mortgage lender announced that its Managing Director (MD) and Chief Executive Officer (CEO) Girish Kousgi had resigned to pursue opportunities outside the organisation.

 

His resignation takes effect on October 28, a year before his tenure ended.

 

“The sharp drop in shares of PNB Housing Finance was a result of overreaction by market to the MD & CEO resignation, along with a larger uncertainty and broader weakness in the market. Also, the housing finance sector has been broadly muted as the interest rates are down coupled with uncertainty in the information technology sector affecting demand for real estate and housing finance,” said Kranthi Bathini, equity strategist, Wealthmills Securities.

 

 

To calm investor sentiment, the company in a statement said that its team would continue to achieve the company’s goals of robust growth, asset quality, and margins, and the board will immediately start searching for a professional with proven expertise and industry experience.

 

Additionally, Kousgi will work with the board and senior management to ensure a smooth transition during this period, the company said, adding that its strategic priorities, business focus, and growth trajectory remained firmly intact, based on the strong foundations that Kousgi has helped build.

 

R Chandrasekaran, chairman, nomination and remuneration committee, board of directors, said: “The board will initiate a process to appoint a leader who will further enhance the legacy of PNB Housing Finance. We are confident of identifying (one).” 

 

Kousgi was appointed MD and CEO on October 21, 2022. The appointment was approved by shareholders through postal ballot on December 22, 2022, for four years effective October 21, 2022, after the early exit of Hardayal Prasad, who had resigned on October 20, 2022, due to personal reasons.

 

“There seems to be a perception that the company was facing challenges in close proximity. In 2019, the promoter, Punjab National Bank (PNB), decided to divest its stake in the company and it entered into share-purchase agreements with Varde Partners and General Atlantic Group in March (that year), and those were terminated in May 2019, with PNB continuing as the sole promoter in the organisation,” said an industry expert.

 

“In 2022, Prasad exited a year before the end of his tenure. The year also saw multiple exits at senior levels. Also, the guidance from the board of the company was limited,” he added.

 

Furthermore, in the quarter the company saw multiple exits including those of Dilip Vaitheeswaran, chief sales officer (function head) of the company, and Anujai Saxena, business head (affordable business), apart from the resignation.

 

In Q1FY26, retail loan assets of the company increased 18 per cent year-on-year (Y-o-Y) to ₹76,923 crore. This came with a 143 per cent increase in the affordable housing segment to ₹5,744 crore and 20 per cent growth in emerging market segment to ₹22,701 crore.