Pricing for Carlyle deal kosher: PNB Housing

NEW DELHI:  PNB Housing Finance on Wednesday said the process followed by it in issuing shares worth Rs 4,000 crore to investors led by US private equity giant Carlyle Group, is perfectly in line with the market practice followed by listed companies as well as in compliance with the applicable law. 

Responding to clarifications sought by the bourses over its Rs 4,000 crore deal with Carlyle and others, PNB Housing said there is no prescribed methodology to be followed with regard to the valuation of shares of a listed entity and as such, there is no prescribed distinction between a pricing and a valuation certificate.

The stock exchanges had also asked the company to submit the pricing certificate from a registered valuer. To this, PNB Housing said, “It was not required under the applicable law to procure a valuation as per the relevant section of the Companies Act 2013 dealing with the preference issue of shares.” 

It, however, added that it had obtained a valuation report dated May 29, 2021 from BR Maheshwari & Co LLP, the firm’s statutory auditor. “Further, the management had also received a valuation report dated May 31, 2021 provided by the lead investor,” as per the filing.

The company further said its board of directors took into account various factors, including but not limited to the urgent requirement for funds, the general downturn in the economy, inability of its promoter company PNB to invest further funds due to rejection of regulatory approval and price (relative to market price) at which various types of issuances (including rights issues and QIPs) have taken place.