PNB Housing Finance launches IPO

One of Carlyle’s housing finance company in India is planning an IPO to raise growth capital.

PNB Housing Finance, the housing finance arm of Punjab National Bank, is planning to raise Rs 2500 crore through its initial public offering (IPO), according to a filing from Securities and Exchange Board of India (SEBI).

The non-banking financial company (NBFC) currently holds 51 percent of the company and its share is expected to be diluted after the IPO, depending on the valuation. 

This would be a fresh sale of shares and the proceeds will be used as growth capital.

According to a local press report, The Carlyle Group, the second major holder of the company with 49 percent of the total share, will stay put and keep its stake at the time of the IPO.

Kotak Mahindra Capital Co. Ltd, DSP Merrill Lynch Ltd, JM Financial Institutional Securities Ltd, JPMorgan India Pvt Ltd and Morgan Stanley India Co. Pvt. Ltd have been hired to manage the IPO.

The private equity firm acquired a 49 percent stake in the NBFC from the purchase of New Silk Route from financial service firm Destimoney in February this year.

The lender has also received a $150 million seven-year loan from the Asian Development Bank in June.

PNB Housing is the fifth-largest mortgage lender in India by loan portfolio as of 30 September 2015. Its parent is one of the largest state-run banks in India. The mortgage lender’s loan portfolio grew at a compound annual rate of 62 percent between 2012 and 2016.