Carlyle to Sell 10% Stake in PNB Housing Finance
EXITING WITH BIG PROFIT The PE firm, which had invested ₹1,600 cr in 2015 for a 49% stake, will make more three times its initial investment
Mumbai: Global private-equity major Carlyle is seeking to sell a 10% stake in PNB Housing Finance, making more than three times the money it had initially put in and likely boosting the performance of the Asia buyout fund through which it holds the investment in the Indian mortgage lender.
PNB Housing Finance, which listed in Mumbai in November 2016 after a ₹3,000-crore initial public offer, has seen its market value almost double since the public debut. The share price has risen from ₹775 apiece to ₹1,335 apiece. Carlyle had invested ₹1,600 crore in February 2015 for a 49% stake in the unlisted company.
“Private-equity fund Carlyle has put a 10% stake on the block in PNB Housing Finance and is looking to sell it in the next 12-18 months,” said a source close to the development.
The listed mortgage lender has a market capitalisation of ₹22,242 crore. Carlyle’s 37.55% stake is worth ₹8,351 crore in the listed subsidiary. A 10% stake sale would fetch Carlyle ₹2,224 crore at current market prices.
Carlyle did not comment on the proposed stake dilution. Sanjaya Gupta, managing director of PNB Housing Finance, also said that he would not like to comment as it is a subject involving shareholders.
PNB Housing Finance is the second largest deposit taking housing finance company and Carlyle is its largest shareholder, followed by Punjab National Bank (PNB) that owns 33%. In November 2017, PNB had sold 6% to a clutch of investors, including the General Atlantic Singapore Fund.
In February 2015, Destimoney Enterprises Limited’s 49% stake was sold to Quality Investments Holding, a company of the Carlyle Group, L.P, and incorporated in Mauritius.
Other investors include Birla Sunlife MF, Motilal Oswal MF, Wasatch, T.Rowe Price, Government of Singapore, Fidelity, Invesco, Reliance MF and Nomura Asset Management.
During the initial share sale, PNB had reduced its stake in PNB Housing Finance to 39% from 51%.
The company has assets under management of ₹57,668 crore at the end of December 2017. Its gross nonperforming loan was at 0.42%. The government has given a boost to affordable housing by creating a dedicated fund in collaboration with the National Housing Bank as it looks to fulfil its target of building such homes for all by 2022.
Also, to boost the inventory of affordable homes in the coming fiscal year, New Delhi has decided to build 5.1 million homes in rural areas. Assistance has been provided to construct 3.7 million homes under the Pradhan Mantri Awas Yojana.
Shares of the company declined 1.22% to ₹1,335.20 on the Bombay Stock Exchange Wednesday.