 "PNB housing finance, Punjab national bank")
Shares of PNB Housing Finance soared 14.5 per cent to Rs 720.4 per share on the BSE in Monday's intraday deals amid a slew of credit rating upgrades by rating agencies. At 10:08 AM, the shares were quoting 13.2 per cent higher at Rs 712.4 as against 0.68-per cent rise in the benchmark S&P BSE Sensex.
On March 29, CARE Ratings upgraded PNB Housing Finance's Long Term Bank Facilities, worth Rs 15,600 crore, to 'CARE AA+' from 'CARE AA'. The outlook was changed to 'Stable' from 'Positive'.
Similarly, ratings on various bond instruments were revised from 'CARE AA' to 'CARE AA+'. Meanwhile, it reaffirmed its rating on Commercial Papers worth Rs 10,000 crore as 'CARE A1+'. CHECK FULL LIST HERE
The upgrade, CARE Ratings said, derived strengths from its improving asset quality as reflected in gross non-performing asset (GNPA) ratio of 1.73 per cent as on December 31, 2023 as against 8 per cent as on March 31, 2022.
"The revision of rating factors in PNBHFL's strong market position as the third-largest housing finance company in the country (on Loan Asset basis as on December 31, 2023) along with a well-diversified resource profile. The ratings also takes into consideration the brand linkages with Punjab National Bank (PNB) (rated at CARE AAA; Stable); the promoter of PNBHFL and the consistent support derived from the promoters," it said.
Separately, rating agency Icra, on March 28, has upgraded the company's non-convertible debentures (NCDs) rating to 'ICRA AA+' from 'ICRA AA' with Stable outlook (from positive). These NCDs are worth Rs 1,600 crore. CHECK FULL LIST HERE
More From This Section
The rating and outlook on Tier-II bonds, too, have been revised in the same way.
According to analysts, PNB Housing Finance has been improving its credit profile, driven by the improved asset quality metrics and the strengthened capitalisation profile. The company has an established track record in the mortgage finance industry with assets under management (AUM) of Rs 68,549 crore and loan book of Rs 62,337 crore as on December 31, 2023.
The company's managed gearing declined to 3.9 times in December 2023 from 5.6 times in March 2023 (6.3 times in March 2022), driven by the Rs. 2,494-crore fresh equity capital raised in 9MFY24.
"In Icra's opinion, PNBHFL is well capitalised to support its envisaged growth plans in the near-to-medium term," the agency said.
Punjab National Bank (PNB), the promoter group of PNB Housing, is expected to hold a stake of more than 26 per cent in PNBHFL’s equity. This gives the housing finance-arm the benefit from the shared brand name, which helps it leverage its franchise and raise funds, supporting its financial flexibility, analysts added.
During the December quarter of FY24, PNB Housing Finance reported a nearly 26 per cent rise in net profit as lower overall expenses made up for dipping interest income.
The company's consolidated net profit rose to Rs 338 crore (nearly $41 million), up 25.7 per cent, from Rs 269 crore a year earlier as overall expenses dipped almost 8 per cent.
The company's disbursements in the retail segment jumped 22 per cent, boosting total disbursements for the quarter to 21 per cent to Rs 4,143 crore. This is the company's largest segment, accounting for almost all of total disbursements.
