PNB Housing Finance Private Limited is the HFC going public after almost a decade. They are coming with an initial public offer which will hit the primary market on 25 October 2016. The company aims to raise Rs.3000 Crore by offering shares at Rs 750-775 per Equity Share. This will be the second largest issue in 2016(first was ICICI prudential). Based on the share price, 
they are valuing the company at Rs 13,000 crore.
About Company:-
PNB Housing Finance Private Limited is a subsidiary of Punjab National Bank and was incorporated on November 11, 1988. They are fifth largest HFC in India by loan portfolio and second largest amount of deposits in an HFC in India They offer their customers “housing loans” as well as “Non housing loans”.
Housing Loans are for the purchase, construction, extension or repairing of damaged residential properties or for the purchase of residential plots. They provide housing loans to real estate developers of residential housing in the form of construction finance loans. PNB Housing Finance Private Limited target customers for housing loans are salaried customers who will get salary from the firm they worked in and self-employed customers who will get income from their business or profession.
They offer Non-Housing Loans in the form of loan against property to property-owning customers through mortgages over their existing property. NRPL(Non residential property loan) for the purchase or construction of non-residential premises. LRD(Lease Rental Discounting ) loans offered against rental receipts derived from lease contracts with commercial tenants and CTLs(credit tenant lease), which are general purpose loans to developers and/or corporates for purposes of on-going projects or business needs.
Company’s housing loans constituted 70.31% of their total loan portfolio and retail housing loans constituted 86.52% of total housing loan portfolio. Non-Housing loans constituted 29.69% of their total loan portfolio and retail non-housing loans accounted for 78.27% of their total non-housing loan portfolio.
They have presence all over India and have 47 branches across the northern, western and southern regions of India which act as the primary point of sale and assist with the origination of loans, various collection processes, sourcing deposits and enhancing customer service. Company has 16 processing hubs that support branch operations and located at New Delhi, Bengaluru, Chandigarh, Chennai, Noida, Jaipur, Dehradun, Lucknow, Kolkata, Cochin, Coimbatore, Mumbai, Pune, Ahmedabad, Indore and Hyderabad which support functions, such as loan processing, credit appraisal and monitoring. They have distribution network included over 7,110 channel partners across different locations in India.
Competitive Strengths:
- Fifth largest HFC in India and the fastest growing HFC among the leading HFCs in India
- Strong distribution network with deep penetration of key Indian urban centers
- Scalable operating model and centralized and streamlined operational structure
- Access to diversified and cost-effective funding sources
- Diversified product offering with specific focus on self-employed customers
- Customer-centric approach resulting in strong brand recognition
- Prudent credit underwriting, monitoring and collection processes
- Managed by experienced and qualified professionals with strong industry expertise
- Support from their parent and promoter PNB.
LOAN Products:-
- Housing Loans:- Retail Housing Loans, Construction Finance Loans for Real Estate Developers
- Non-Housing Loans:-Loans against Property, Non-Residential Premises Loans. Lease Rental Discounting, Corporate Term Loans.
Company Promoters:-
The nationalized bank Punjab National Bank(PNB) is the promoter of the company holds 64,730,700 Equity Shares which constitutes 51.00%, of the Company’s pre-Issue paid-up and subscribed Equity Share capital.
Objects and details of the Issue:
This issue objects are as follows:
- Augment the capital base to meet their future capital requirements;
2. General corporate purpose;
3. Enhance visibility and brand name among existing and potential customers.
Financial:-
The HFC’s loan portfolio grew at CAGR of 62% to Rs.27,177 crore in 2016 from rs.3,970 crore in 2012. As of 30 June 2016, the HFC’s loan portfolio stood at Rs.30,900 crore. They have EPS of 27.58 giving it a P/E of around 28. It peers have a P/E ranging from 15 to upto 30.
To better see in perspective, have a look at the Housing Finance market in India and how PNB is stacked against them.
Bid/Issue Period
- BID/ISSUE OPENS- ON Tuesday, October 25, 2016
- BID/ISSUE CLOSES – ON Thursday, October 27, 2016
- FINALISATION OF BASIS OF ALLOTMENT- On or about November 2, 2016
- INITIATION OF REFUNDS FOR ANCHOR INVESTORS/UNBLOCKING OF FUNDS- On or about November 3, 2016
- CREDIT OF EQUITY SHARES TO DEPOSITORY ACCOUNTS – On or about November 4, 2016
- COMMENCEMENT OF TRADING – On or about November 7, 2016
Disclaimer: We are not SEBI registered advisor and this article is not an investment advice. We are not authorized to give investment advice nor do we provide it on this website. In case you are interested in investing, we would advise you to contact your advisor for the same. We cannot be held liable for any loss arising due to investment made as per this article.
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