PNB Housing Finance shares surge 10% amid block deal; General Atlantic Singapore Fund looks to exit

Shares of PNB Housing Finance, an arm of PSU lender Punjab National Bank, rallied over 10% in early trade on Wednesday, driven by strong volume as more than 1.4 crore shares worth over ₹1,142 crore changed hands over the counter. As per the exchange data, around 5% stake in the housing finance company was sold via block deal. The names of buyers and sellers were not known immediately but a report suggests private equity investor General Atlantic Singapore Fund was looking to exit from the company by paring its entire stake.

General Atlantic Singapore Fund FII Pte Ltd was planning to sell its entire 5.13% stake in PNB Housing Finance, aiming to raise ₹1,033 crore.

Earlier in May this year, Asia Opportunities V Mauritius and General Atlantic Singapore Fund had sold a cumulative 5.2% stake in the company worth around ₹500 crore via block deal.

Driven by strong volume, PNB Housing Finance shares opened 1.8% higher at ₹830 against the previous closing price of ₹815 on the BSE. In the first hour of trade so far, the state-owned housing finance stock rose as much as 10.2% to ₹893.6, while the market capitalisation jumped over ₹22,600 crore. The counter witnessed strong volume as 1.42 crore shares changed hands over the counter compared with a two-week average of 0.83 lakh stocks.

The PNB Housing Finance share price touched its 52-week high of ₹913.95 on January 25, 2024, and a 52-week low of ₹600.40 on March 14, 2024. In the last one year, the stock has given 32% return to its shareholders, while it rallied 20% in six months and 10% in a month. In the calendar year 2024, the stock has risen nearly 11%.

For the first quarter ended June 30, 2024, PNB Housing Finance reported a profit of ₹433 crore, up 25% from ₹347 crore a year ago. The total disbursements was up 19% YoY to ₹4,398 crore, while net interest income rose 4% to ₹651 crore. The gross bad loans of the company improved to 1.35% in Q1 FY25, from 3.76% in the year ago period as the company decreased its corporate loans over the last few quarters amid rising bad debts.

In May, CRISIL Ratings upgraded the company’s long-term debt instruments and bank facilities to ‘AA+’ from ‘AA’, with stable outlook and rating on the short-term bank facilities and debt instruments reaffirmed at ‘A1+’. The rating agency said that the action reflects improving profitability and asset quality metrics. “Strong capitalisation and increased granularity with most of the legacy portfolio having been provided for, also supports the overall credit profile of the company,” it said in a report.

The agency said that the company’s ability to maintain profitability, while further scaling up operations will remain a monitorable.

As per CRISIL report, disbursements gained momentum in fiscal 2024 to ₹17,583 crore; highest since fiscal 2019. The assets under management (AUMs) grew by 7% to ₹71,243 crore from ₹66,617 crore a year earlier, driven by 10% growth in retail book while the corporate book continues to run down (3% of the overall AUM as on March 31, 2024. Going forward, retail loans will remain the key growth driver, the rating agency said. 

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