Two officials familiar with the development told the Economic Times that the public sector bank has received interest from some players and private equity investors.
"The bank is open to selling its stake in the firm. We have not decided on the amount or time of the stake sale," MD, Usha Ananthasubramanian told the newspaper.
PNB currently holds a 39 percent stake in the housing finance company.
At yesterday's closing price, 7 percent stake on PNB Housing Finance could fetch around Rs 1,200 crore.
"We have had some early discussions. There is a lot of interest as PNB Housing has a great portfolio, low non-performing assets and has done considerably well after it got listed," one of the officials said.
He added that the bank will look to maximise its returns from the proposed sale.
The stake sale may happen in the second quarter of FY18, another official told ET, adding that the bank was well-placed when it came to availability of funds.
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