PNB Housing to raise up to Rs 10,000 cr by issuing bonds in tranches

PNB Housing Finance will raise up to Rs 10,000 crore by issuing bonds in tranches, the company said on Wednesday.

The company's board will meet on October 24 to declare quarterly earnings for the second quarter of this fiscal and will also consider proposal to raise fund, the bank said in a regulatory filing.

The board will consider the issuance of secured and unsecured non-convertible debentures aggregating up to Rs 10,000 crore in tranches, PNB Housing Finance said.

Shares of the company were trading 13.24 per cent lower at Rs 379.20 on the BSE in the post-noon session.

PNB Housing to cut effective tax rate by 8-9% after FM's announcements

PNB Housing Finance on Monday said the company's effective tax rate will come down by 8-9 percentage points following the government's decision to slash corporate tax rate.

For 2018-19, the effective tax rate of PNB Housing Finance on consolidated basis was 31.30 per cent.

On September 20, Finance Minister Nirmala Sitharaman announced slashing the basic corporate tax rate for domestic companies to 22 per cent from 30 per cent. The effective tax rate for domestic companies reduced to 25.17 per cent from 34.94 per cent inclusive of surcharge and cess.

"Considering the tax reductions per the announcement, the expected reduction in the effective tax rate for PNB Housing can be anywhere between 8-9 per cent," it said in a regulatory filing.

As per the government's latest investment boosting measure, new manufacturing companies that start production on or before March 31, 2023 and are incorporated on or after October 1, 2019 will have an option to pay tax at 15 per cent if they do not avail any exemption/incentive.

The effective tax rate for such companies will be 17.01 per cent, inclusive of surcharge and cess.

This is a very positive move and is expected to result in enhanced economic activity along with the reduction in tax rates, PNB Housing Finance said.

Company's Managing Director Sanjaya Gupta said a slew of measures have been taken by the government to revive the economy and housing finance sector.

"This includes measures like relaxation in minimum holding period to six months for securitisation, additional liquidity support to NHB for further lending to HFCs, on-lending of housing loans up to Rs 20 lakh to be qualified under PSL (priority sector lending), relaxation in ECB end use and fund for real estate sector, which are all positive for housing finance sector," Gupta said.

These measures will boost liquidity in HFCs (housing finance companies) and shall immensely help in enhancing the sector's fund position and further strengthen the asset liability management.

Moreover, the reduction in corporate tax rate will be a big boost to the capital base and help revive the growth and employment generation across all sectors, Gupta added.

Stock of the company traded 2.43 per cent down at Rs 663 on BSE.

PNB's stake sale in housing finance arm 'credit positive': Moody's

The sale of Punjab National Bank's 13 per cent stake in PNB Housing Finance is credit positive as it will strengthen the bank's capital, Moody's said Monday.

Last month state-run Punjab National Bank announced that it will sell 13 per cent stake in PNB Housing Finance for Rs 1,850 crore (USD 270 million) to global private equity firm General Atlantic Group and alternative investment firm Varde Partners.

"The proceeds of the sale will strengthen the bank's capital, a credit positive. We estimate that the sale will increase PNB's Common Equity Tier 1 (CET1) ratio by about 40 basis points from the 6.9 per cent reported in December 2018," Moody's said in a statement.

The stake sale provided timely support to bank's capitalisation, which has been challenged by high credit costs and investment losses, in addition to the negative effect of fraudulent transactions PNB discovered between February and March 2018, it added.

"We expect the bank's internal capital generation to improve gradually as declining credit costs alleviate pressure on its capitalisation over the next 12-18 months," Moody's said.

It said the recent government capital infusion in February 2019, increased the bank's pro forma CET1 ratio by around 150 basis points. The lender's the overall pro forma ratio is nearly 9 per cent.

Upon completion of the sale, PNB will retain a 19.8 per cent stake in PNB Housing Finance worth around Rs 3,000 crore (USD 440 million).

"The stake will remain a key potential source of capital for PNB, given its limited access to the equity capital markets following the substantial decline in its share price over the past year," the US-based agency said.

Moody's estimates that a sale of the remaining stake at a valuation similar to the current deal would increase PNB's CET1 ratio by approximately 70 basis points.

Despite the bank's losses over the past few quarters, PNB's reported CET1 ratio has improved as a result of government capital infusions and a reduction in risk weighted assets, Moody's said.

"PNB's core profitability remains robust given its strong franchise as one of the leading public sector banks in India supported by a superior funding profile and strong net interest margins," it added.

PNB offloads stake in PNB Housing Finance for Rs 1,851 crore

State-owned lender Punjab National Bank (PNB) is selling stake in its housing finance arm -- PNB Housing Finance – to General Atlantic Group and VardePartners for Rs 1,851 crore at Rs 850 per share.

Both VardePartners and General Atlantic Group will buy 1.089 crore shares each at Rs 850 per share in the housing finance company from Punjab National Bank.

After the transaction, Punjab National Bank will continue to hold a strategic stake of 19.78 per cent in the housing finance company and will remain the promoter and strategic shareholder of the company, the lender informed the stock exchanges on Friday.

Earlier in July 2018, PNB housing finance had informed the exchanges that PNB and Quality Investment Holding (QIH) were considering a joint stake of a minimum of 51 per cent in the housing finance company. However, in November 2018, PNB housing finance said that PNB will independently pursue and proceed with the sale of its shareholding to financial investors via a competitive bidding process.

QIH, on the other hand, had decided to withdraw from the joint sale process. However, QIH had stated that it is considering all options including re-starting the sale process (whether jointly or independently) depending upon market conditions amongst other factors.

It had also mentioned that it might consider buying an additional stake in PNB Housing Finance Company or participate in a potential sale process as a buyer.

PNB was trading 0.63 per cent higher than its previous close at Rs 95.95 on the BSE while PNB Housing Finance company was tradin