I would like to see Piramal Enterprises also
Piramal vs Kotak
I would like to see Piramal Enterprises also
Piramal vs Kotak
How about Bajaj Finance
No incentive for Bajaj finance as they have their own housing finance and enjoy superior customer loyalty. Their business model is repeat customers giving more business. I believe it makes more sense for Kotak / Yes / Piramal to acquire this “government” tag.
Doubt if Bajaj Finance would buy this . Am guessing a PE players have the edge here.
The acquirer has to make open offer for 26% shareholding, thus taking their tally to 77%. Balance 23% will be with public. The fastest growing, 5th largest housing finance company, in a country relatively under penetrated and hence having huge scope for mortgage finance. Q4 earnings call mentions decades of growth ahead. Growing 1.75 times market growth also means grabbing market share from competitors. Literally a in the ocean.
Anyone who attended AGM?
General Public share holding is less than 5% at present. So the acquirer has to make open offer to mutual funds/ financial institutions who are well aware of valuations and cannot be bluffed. Generally these funds/institutions would have cornered the remaining shares and would be calling the shots.
I think the buyer needs to make an open offer at the price it has been acquired. Does not mean that institution will tender their shares so no need for convincing any institutions to sell. Anyways at 51% controlling stake is on the block.
If the price is not favourable, open offer need not be accepted by the institutions. SEBI guidelines prescribe open offer when someone acquires more than 25% share holding in any company, in which case he has to make open offer for addl. 26% shareholding. This is an investor protection measures to enable those who do not like the new promoter to sell. The open offer price cannot be lesser than the price paid by the acquirers or the 2 month weighted average price whichever is higher. The stock is presently available at an acquirers multiple of 15 (Enterprise value/operating profit) which is quite reasonable, considering EPS growth expectation of more than 50% in the current year and 1.75 times market growth for years to come. The high ambitions of mortgage veteran Sanjaya Gupta can be seen in the capital raising plans proposed for next year by which time ROE will be raised to 19%. In the market it is growth which has precedence and growth is life. In mortgage business, the more capital you take, the more the growth. Mortgage companies being fully leveraged 10 times, can grow with their profits again being leveraged 10 times. What to speak of a company which also plans to take addl. 8000 crores capital (thus another 80000 crores in leverage) with plans to come to the market every 3 years. What to say of such a company. Pity to its competitors.
Global Investor Syndicates in the Fray to Acquire PNB Housing Fin
FOR A CONTROLLING STAKE Groups headed by Fullerton, Blackstone & Temasek, and CPPIB & Apax Partners vying for a deal which could fetch ₹14,000 cr for PNB and Carlyle
Two global investor syndicates, one led by Fullerton, Blackstone and Temasek and the other by CPPIB and Apax Partners, are competing to purchase a controlling stake in PNB Housing Finance, the home financing unit of the Punjab National Bank.
The deal is expected to fetch ₹14,000 crore, two persons close to the developments told ET. The listed mortgage lender has a market value of ₹21,202 crore.
Promoters Punjab National Bank and private equity investor Carlyle, which together own about 66% of the home financier, have put their stakes on the block. Carlyle has appointed Morgan Stanley as its advisor while Credit Suisse is the investment banker to PNB.
“Non-binding bids will be submitted by August 25, followed by the shortlisting thereafter and then the bidders will submit a binding bid. The entire process will be over by December,” said one of the two persons cited above.
Other investors in PNB Housing Finance include Birla Sunlife MF, Motilal Oswal MF, Wasatch, T Rowe Price, Government of Singapore, Fidelity, Invesco, Reliance MF and Nomura Asset Management.
“General Atlantic, the American private equity investor and the third-largest shareholder in PNB Home Finance, has shown interest in investing an additional $300 million to $500 million to raise its stake to beyond 10% in the company in the process,” said the second person cited above. The General Atlantic Singapore Fund had raised its stake in the company in November 2017 to around 10% by purchasing shares from rival Carlyle.
Blackstone, Morgan Stanley and Apax Partners said they do not want to comment, while Fullerton did not respond to an email query. Temasek could not be reached immediately for comments.
PNB has been looking to disinvest stakes in PNB Housing Finance, Icra, Crisil and BSE to implement the defined reforms agenda for responsive and responsible PSBs (public sector banks).
After the country’s biggest banking scam — whereby diamond jewellers Nirav Modi and Mehul Choksi allegedly used fraudulent PNB guarantees to borrow nearly ₹14,500 crore from banks abroad — came to light, PNB management had assured its investors that the bank will look to liquidate investments in non-core areas to strengthen its capital position.
As on March 31, 2018, the bank’s capital adequacy ratio as per Basel III requirement declined to 9.20%, down from 11.66% a year earlier. As per the RBI’s norms, the total capital adequacy, including counter-cyclical buffer, should be upwards of 11.5%.
PNB Housing Finance has been expanding disbursements at a 52% compound annual growth rate over the last four years. The company had assets under management of ₹62,252 crore at the end of March 31, 2018. Its net non-performing loans were at 0.25% of the total.
PNB Housing Finance has 84 branches across the north, south and west. Mortgages account for 70% of the business. The stock ended Friday at ₹1,071.35 on the Bombay Stock Exchange, down 3%.
Since listing in November 2016 after a ₹3,000-crore initial public offer, PNB Housing Finance has seen its market value almost double.
Carlyle invested ₹1,600 crore in February 2015 for a 49% stake in the then unlisted company. It now owns a 33% stake, having recently sold about 5% in the open market.
Seems its an old article, can you share the source /link for more clarity to VP community.
It has appeared in Today’s Economic Times Mumbai Edition.
Strange that even they do copy paste (The universal tool used by online media). Friday closing was 1260 & NOT 1071.35.
This report from CNBC also refers to interest from Kotak Mahindra Bank & Indiabulls Housing Finance
Basant Maheswari on PNB Housing in yesterday’s interview with CNBC.
Great to see that once the stake sale is sealed the stock should get back to to 1700 range which was the case before this stake sale.
Disbursement growth has slowed down clearly when compared with last so many quarters. Wonder why?Otherwise decnt performance. RoE has crossed 15% after many quarters on higher leverage.
Continued good performance reported today and with stable asset quality. Sanjay Gupta has made PNB HF outperform all its peers - he has been true to his word of growing it atleast 150% times the others.