result on 5th NOV. not on 25th oct.
PNB Housing Finance raises Rs 1,775 crore through commercial papers
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Sir… The supertech account is delinquent if not in default… A delinquent account is cause for serious concern because it often presages default… Markets react and tend to price in future outcomes esp when things have been frothy in the past… Perhaps it was the operators too who took this stock to 1700 odd on the way up?.. While I agree that it could be time to make staggered investments in a well managed company like pnb hf, your post additionally highlights the key man risk in the company which one should be cognizant of.
If HDFC was Agni V, PNB HF is Agni VI, a long range ballistic missile. Whatever HDFC has done, PNB HF is replicating and much faster at that. Of course there is key man risk. But this man is very young.
In the previous concall, Sanjaya Gupta informed that he is building an organisation that will last for ever, an organisation people will appreciate and take pride in, long after he is gone. He declared that he could very easily show fantastic results (a la IBHF?) but is being conservative, so as to have something to fall back on (hidden reserves?) being fully prepared to meet any calamity ( Supertech?).
PNB HF shareholders will be rewarded only in the long run. In the 2017 Q4 concall, Sanjaya Gupta declared that he sees decades of growth going forward.
PNB Housing Finance Limited raises INR 1,775 crores through
New Delhi, 22nd October 2018: PNB Housing Finance Limited, India’s 5
Housing Finance Company, has successfully raised INR 1,775 crores through Commercial
Papers (CP) in October 2018. The CPs are placed to various Mutual Funds and Banks.
Mr. Sanjaya Gupta, Managing Director, PNB Housing Finance Limited said, “In spite of the
current tight market scenario our Company has successfully raised funds through CPs
aggregating to INR 1,775 crores at competitive rates. We are thankful to various lenders for
placing their funds in our Company. These borrowings in the present environment exhibits
the trust and faith of the lender community in PNB Housing Finance Limited.”
Mr. Kapish Jain, Chief Financial Officer, PNB Housing Finance Limited, further added, “In
October 2018 we have successfully raised INR 1,775 crores through CPs in addition to ECB.
This has been possible only because of our strong fundamentals moreover we are
comfortable both on our liquidity and ALM position. Further to add, this fund raise shall not
increase our overall exposure to CPs and we would continue to maintain our overall borrowing
through CPs at around 12-13% compared to 19% as of 31st March, 2018. During the month
of September 2018, we did not raise any funds from capital market in view of the surplus
liquidity we had. As on date, the Company has cash and liquid investments of approx. INR
PNB housing has come up with a newspaper campaign in my place, offering housing loans with step up EMI, where repayment becomes larger as the salary increases. This is a brilliant move by the management stealing the thunder from the Piramals who started this novelty. Advertising at this time, when others have stopped giving loans, only shows that when the going gets tough, the tough get going. However my phone calls to the local branch (phone numbers which were available in their website) were not being picked up or called up later.
If PNB housing increases its ROE, next year, it will give a tremendous spurt in share price, as a 1% rise in ROE leads to a manifold rise in share price.
Govt./ PSU employees get regular increases in salary every 5 to 10 years. What appears to be a huge EMI now, appears too small in say 5 to 10 years.
I myself prepaid my housing loan EMI within 5 years. If I had gotten a larger loan, the housing finance company, could have made me its slave for life. PNB housing is a management always on its toes, says Sanjaya Gupta. Warren Buffett always talks about strengthening your moat.
This is a brilliant move by PNB HF… if they are able to manage the risk well, this could virtually guarantee an ever increasing income for the company…
The only hiccup here is that the client is eligible for a huge loan upfront as he will be paying only a small emi to start off with. If it leads to a default especially in the initial years, it can be very painful to the company in terms of recovery.
Might be a stupid question but could someone pls answer this query? As at June 30, 2018 the book value per share was INR 411.1 per share and it is INR 413.2 per share as at September 30, 2018. What explains the meagre growth in book value in spite of a healthy profit growth?
1-Some bad loans (for which company might have already provisioned money) which were still sitting on the balance sheet as on 30th June might have been taken out of the books as on 30th Sep. ( This is most usual reason).
2- High depreciation (very unusual for finance company).
Looks like point 1 is true here, if you listen to the interview above Sanjay mentions a few builder accounts which were NPAs have been moved out.
Carlyle group (QIH) withdraws from joint stake sale process. We have been informed vide communication dated 13th November, 2018 received from PNB that “PNB will continue to independently pursue and proceed with the sale of its shareholding in part or full to strategic/ financial investors through a competitive bidding process in PNBHFL.” Earlier, we have received a joint communication dated 13th November, 2018 received from PNB and QIH that “QIH has decided to withdraw from the joint sale process. As a financial investor QIH will however continue to consider all options with respect to its shareholding in PNBHFL including re-starting the sale process (whether jointly or independently) depending upon market conditions amongst other factors. Further, QIH may as a public shareholder also consider purchase of additional stake in PNBHFL or participate in a potential sale process as a buyer as appropriate at its sole discretion and subject to applicable laws. PNB reserves its right to evaluate alternatives around its shareholding in PNBHFL.”