PNB Housing to get Rs 4000 crore from investment cycle led by Carlyle

Aditya Puri is expected to become a board member at PNB Housing as a Carlyle nominee director.

Punjab National Bank promoted PNB Housing Finance Ltd will raise Rs 4000 crore through an investment cycle led by entities of The Carlyle Group Inc. The biggest investment of Rs 3185 crore will be done by Pluto Investments S.a.r.l., an affiliated entity of Carlyle Asia Partners IV, L.P. and Carlyle Asia Partners V, L.P.  through a mix of preferential allotment of equity shares and warrants of PNB. The price per share from the investment comes out at Rs 390.

Existing investors including funds managed by Ares SSG and General Atlantic will also be participating in the fundraising cycle. Even after these investments, PNB will continue to remain the promoter and a major stakeholder of the company. With the capital raised, PNB Housing aims to increase its capital adequacy ratio, reduce gearing and increase growth.

The investment needs to get regulatory and shareholder approval. If the deal goes through as planned, PNB Housing’s capital adequacy ratio till March 2021 will increase from 18.7% to 28%.

Aditya Puri, the former CEO of HDFC Bank and currently working as Senior Advisor for Carlyle in Asia, is expected to become a board member at PNB Housing as a Carlyle nominee director. Puri’s family investment vehicle- Salisbury Investments Pvt. Ltd. will also take part in the fundraising. Praising the enhanced capital that’s been with the PNB he stated that it’ll be of great assistance in meeting the growing demand in its areas of operation. Further suggesting that he is positive with this decision he said, “I look forward to helping the Company in this exciting journey.”

According to Hardayal Prasad, Managing Director and CEO of PNB Housing Finance Ltd., the investment coupled with Carlyle’s continued support will help PNB Housing take better advantage of the growing opportunities in the housing finance sector, especially in affordable housing loans and self-employed segments.

Founded in 1988, the Delhi-headquartered PNB Housing is among the largest housing finance companies in India. Increasing urbanization coupled with low-interest rates and favourable government schemes has led to rapid growth in the industry.

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