PNB Housing Finance share price spiked 20 percent to hit a upper circuit of Rs 525.20 on BSE after the company said its Board has approved a capital raise of up to Rs 4,000 crore, led by entities affiliated to American private equity firm Carlyle Group Inc.
Pluto Investments S.a.r.l., an affiliated entity of Carlyle Asia Partners IV, L.P. and Carlyle Asia Partners V, L.P. had agreed to invest up to Rs 3,185 crore through a preferential allotment of equity shares and warrants at a price of Rs 390 a share, the company said in an exchange filing.
"Existing shareholders of the company, funds managed by Ares SSG and General Atlantic, are also participating in the capital raise. PNB will continue to be the promoter and a key stakeholder in the company," it added.
The transaction is subject to customary regulatory approvals as well as shareholder approval. Pursuant to the Securities and Exchange Board of India’s Takeover Regulations, the proposed transaction will trigger a mandatory open offer by Pluto Investments S.a.r.l. for the purchase of up to 26 percent equity shares of PNB Housing Finance from public shareholders, the bank further added.
The stock was trading at Rs 525.20, up Rs 87.50, or 19.99 percent, at 1043 hours. It has touched a 52-week high of Rs 525.20. There were pending buy orders of 374,737 shares, with no sellers available.
The key objective of raising capital is to augment capital adequacy, reduce gearing and accelerate growth with a focus on retail housing including self-employed and affordable housing loans such as the Unnati segment.
Assuming full capital infusion (including warrants) and no other change to the March 31, 2021 financials, the capital adequacy ratio of the company as of March 31, 2021 would increase from 18.7 percent to over 28 percent and gearing as of March 31, 2021 will decline from 6.7x to less than 5x, PNB Housing said.
PNB Housing Finance on April 27 reported a consolidated net profit of Rs 127 crore for the last quarter of the fiscal ended March 2021. The company had posted a net loss of Rs 242 crore in same quarter a year ago.