Competition Commission of India clears PNB Housing Finance deal with Carlyle

Punjab National Bank, the main promoter of PNBHF, had also asked the mortgage lender to consider repricing the initial transaction.

The Competition Commission of India (CCI) has accorded “deemed approval” to a proposal of Carlyle-backed Pluto Investments and Salisbury Investments to pick up a majority stake in PNB Housing Finance (PNBHF), even as the Securities Appellate Tribunal (SAT) is yet to deliver its judgment on the deal.

In a notice reviewed by FE, the CCI said: “The proposed combination involves Pluto and Salisbury acquiring up to approximately 56.29% (assuming full tendering and acceptance in the mandatory open offer) and approximately 0.24% of the post-preferential allotment equity share capital of PNBHF, respectively.”

While the deal value isn’t mentioned in the notice, PNBHF board had earlier approved a proposal to raise up to Rs 4,000 crore by issuing equity shares and convertible warrants to entities led by Carlyle Group firms.

Responding to the news on Wednesday, the share of PNBHF hit the 5% upper circuit at Rs 720.45 on the BSE.

In a statement, the corporate affairs ministry said the CCI received a notice on the deal under the so-called “Green Channel”. Under this, the “combination” is deemed to have been approved upon filing the notice in a certain prescribed format. The mechanism was introduced to fast-track the approval process for mergers and acquisitions and cut both delay and costs if the “combinations” meet certain criteria.

In a letter to PNBHF in June, Securities and Exchange Board of India (Sebi) asked the mortgage lender to undertake a valuation of its business by an independent agency before seeking shareholders’ vote on the deal.

PNBHF, however, has said it would await SAT judgment on the matter. The appellate tribunal has already heard both the sides but is yet to pronounce its verdict.

On May 31, PNBHF board had approved the placement of over 82 million preferential equity shares and 20.5 million share warrants with Pluto Investments, and Salisbury Investments, General Atlantic Singapore Fund FII Pte and Alpha Investments V Pte. Salisbury is the family investment vehicle of former HDFC Bank managing director Aditya Puri.

While the issue price for the transaction was Rs 390 per share, the stock surged to as high as Rs 880 per share within a few days of the announcement of the deal.