PNB Housing Fin - Fast Growing HFC

(Rushil) #465

For next 5-15 years, housing demand in India will grow unabated: Keki Mistry, HDFC

Here it is amply assured that they target ROE for inorganic growth.
Hence I don’t think they would want to buy pnbhfl


this looks like a spam link. They are in the business of increasing page views by providing generic stufff. I keep getting 100s of these on different stocks through google alerts. Is there any way we could block these?

(Investor_No_1) #467

I have seen many people with home loans in urban Inida…PNB housing mentions maximum exposure is in Urban? but I hardly notice anyone having home loan with them. DO they have seperate offices or operate via PNB branches only? Is it more developer loans? It is very very difficult to beat HDFC and ICICI in urban india for a retail home loan i believe…in developer loan yes you can…

(abhishkjain2626) #468

Some say market is worried about LAP exposure… pnb’s LAP is ~15% and LtV is hardly even 50% (from their presentation), so unless we have property prices crashing that badly why is that so worrisome?

Disc. Invested but conviction being tested :confused:

(Peabody) #469

All of us who are patient will be rewarded.When I look at PNB H numbers for the last several years-it gives a lot of comfort. On top we have a capable CEO.The entire HFC sector barring of course HDFC twins is under pressure.As and when the move starts it could swiftly move very high. Profits and price do not move in tandem for many mid /small caps and vice versa.I have absolute faith in this company

Disc: Invested

(sumitg04) #470

(RamanTiwari) #474


I seriously doubt HDFC bidding for stake in PNB. 12,000 Crores is a big investment for them now especially when they want to invest in HDFC bank to maintain their stake and fund acquisitions in insurance space.

My best bet will be Blackstone & Barings for bidding for stake in PNB Housing


HDFC has denied having discussions with PNB Housing. More such source-based-news will come. Investors have to be careful…

(RamanTiwari) #477

Kotak has denied the news too

(mrai74) #480

In current scenario, we are bound to have different type of speculations & denials but we saw that CANFIN went through similar phase and there is nothing new except PNBHF seems to be on fast track & don’t want to drag the process. Going by recent experience we know that HDFC, KOTAK, Blackstone & Barings are exploring the options of expanding their business extensively & may purchase controlling stake in open options, where PNBHF is attractive available commodity. Moving ahead with denials from HDFC & KOTAK, the list of buyers is getting trimmed. Although we shouldn’t read too much into denials as it may be true that till now they have not started discussion & denials letters have such words leaving options of negotiations starting at later stage.

Let us keep fingers crossed & don’t get fingers burnt in pump & dump game.

(Julian) #481

“Ladki ki maa toh foreignor hai na dekhe…!”

The above were quoted by Basant Maheswari on Twitter .

Ladki ki saath nahi, ladki ki maa baap se milna hai. Yeh love marriage nahi, arranged marriage toh hai. Sanjay Gupta will never involve himself with such matters. During the concall, he was never interested on talking about this subject. The controlling interest is with PNB and Carlyle and any acquirer, should necessarily meet the girl’s parents. The girl has no say in the matter. The ET news is speculative and baseless to that extent. There is no reason why a beautiful girl should not be desired by all and sundry. So the content of the news need not be false. HDFC has already a bride in Gruh Finance. The second bride will also get the same treatment, ie., allowed to grow without raising equity. Kotak Mahindra bank should be the more interested party. They would be more ideal. Kotak could support the growth aspirations of PNB housing without restriction and allow growth with equity dilution.

Creeping acquisition through the market, especially when gullible investors are willing to sell the stock cheap, should not be ruled out. Based on the concall, where Sanjaya Gupta said that he expects current years growth to be better than last year’s, market expects 75% EPS growth for the current year. It is noted that there is no share dilution this year. Sanjaya Gupta has mentioned that 2018-19 will be the mega year for housing finance. So PNB and Carlyle will wisely go out, when PNB housing is firing on all guns.

Check out @ETNOWlive’s Tweet:

(Raj A A) #482

PNB Hsg AR 2018

(Ronak) #483

Hi Abhishek,

For the benefit of all lets understand basics. This is a bit technical, but if u put in effort, u will understand it well.

Lets take an e.g.


Yield = Total Int. Earned / Average Int Earning Assets of Current year and Last year.

Rationale - We earn Int. on Int. Earning assets (Loans + Investments). However, the Int. earning assets (Loans + Investments) would have accumulated over a period of 1 year on which we earned this int. It is incorrect to say that the Int. was earned on the Assets as on 1st day of year or last day of the year. Therefore Averaging these Assets is better. In my e.g. I am taking only 1 years figure for the sake of simplicity

Yield = 9.5 / 100 = 9.5%

Cost of Funds = Total Int. Paid for the year / Avg. Borrowings

Same rationale for Avg borrowings as discussed above, but for sake of simplicity I am taking 1 years figure)

Cost of Funds = 6.4 / 80 = 8%

NIM’s = Net Int. Income / Avg. Int. Earning Assets

NIM’s = [ Total Int. earned (-) Total Int. Paid ] / Avg. Int. Earning Assets

NIM’s = [ Total Int. Earned / Avg. Int. Earning Assets ] (-) [ Total Int Paid / Avg. Int. Earning Assets ]

NIM’s = Yield (-) [ Total Int Paid / Avg. Int Earning Assets ]

NIM’s = 9.5% (-) [ 6.4 / 100 ]
NIM’s = 9.5% (-) 6.4% = 3.1%

Now, lets see what is Spread

Spread = Yield (-) Cost of Funds

Spread = Yield (-) [ Total Int. paid / Avg Borrowings for the year ]

Spread = 9.5% (-) [ 6.4 / 80 ]
Spread = 9.5% (-) 8%
Spread = 1.5%

So, if you see carefully, the only difference between Spreads and NIM’s is the last part of the equation (As highlighted in Bold below). Also note that this equation is deducted from the Yield to arrive at the NIM’s or Spreads.

[ Total Int Paid / Avg. Int Earning Assets ] Vs [ Total Int. paid / Avg Borrowings for year ]

[ 6.4 / 100 ] Vs [ 6.4 / 80 ]

Even in the above equation, Numerator (Total Int Paid) is the same, hence the only difference will be the Avg Int. Earning Assets Vs Avg Borrowings.

Rs 100 (Avg Int Earning Assets) Vs Rs 80 (Avg Borrowing).

NIM’s = 3.1% Spreads = 1.5%

So, When Avg Int. Earning Assets are > Avg Borrowings - We will get Higher NIM’s than Spreads &
When Avg Int. Earning Assets < Avg Borrowings - We will get higher Spreads than NIM

Now coming to your Point on Why HDFC has higher NIM’s Compared to PNB Housing, inspite of similar spreads.

NIM’s = Yields (-) [ Int Paid / Avg Int. Earning Assets ]

When can NIM’s of one company be higher than the other.

3 possibilities -

1st When Yields are higher than it’s peer
2nd When Absolute Int paid is lower (which depends on the rate of borrowings) than it’s peer
3rd When Avg. Int. Earning Assets are higher than it’s peer.

This is a homework for you and other community members to get these figures.


difference between NIM and Interest Spreads

(himan02) #486

It seems Mutual Fund houses are taking good use of fall in PNB housing share prices. Huge increase in Mutual fund holdings from period Feb 2018 to May 2018.

Sector No. of Funds No.of Shares No.of Shares No.of Shares No.of Shares
May-18|Apr-18 Mar-18|Feb-18
Financials 34 14,837,042 10,741,376 10,539,662 10,389,987


discl: invested and looking to add more

(Ar) #487

Great explanation ronak. I was looking at nim’s and roa data for various hfc’s and comparing to pnb housing, so basically while pnb’s spreads have been similar to other hfc’s their nim’s have been consistently lower resulting in lower roa’s (apart from other factor’s like high cost to income)

So bascially I guess one can say that better capitalization of other hfc’s that is lower leverage resulting in relatively higher avg interest assets to brrowings vs pnb has partly led to higher roa’s. In way other hfc’s use more capital to fund their growth vs borrowings compared to pnb which pnb didnt/couldnt do as they wanted to always grow fast

Would you guys agree with the above ?


Beautiful bride looking for groom version 2.

Hope and trust this will be a smooth affair.

(nikhil) #489

A query. Will there be open offer in this case as both pnb and Carlyle wants to sell? In that case both pnb and Carlyle may sell 50% stake and acquirer will have to make open offer for 26% thereby controlling 75%+. The cost of acquisition may increase to that extent.


It might as well lose its PNB identity. The new owner will have to be one with an existing bankng or HFC arm, if not will have to create a new identity altogether. The PNB name is widely known with instant brand recall.