SEBI Approves PNB Housing Finance to Raise Rs. 2,500 crore Rights Issue of Shares

SEBI Approves PNB Housing Finance to Raise Rs. 2,500 crore Rights Issue of Shares

Securities Exchange Board of India (SEBI) has approved the Punjab National Bank (PNB) Housing Finance, an arm of state-owned Punjab National Bank, to go ahead and raise up to Rs 2,500 crore through rights issue of shares.

The housing finance firm, which had filed draft papers with the capital market regulator in December 2022 regarding the rights issue, received its ‘observations’ on March 6, which is essential for any company to launch the issue.

As per the draft papers of the proposal, PNB Housing is planning on issuing fully paid-up equity shares into its existing shareholders through a rights issue for a sum not exceeding Rs 2,500 crore through a rights issue mechanism.

As a result of the issue, the company does intend to bolster its capital base by using net proceeds from the issue.

As a result of the rights offering, the shareholding of Punjab National Bank (PNB) as a promoter of the company will decrease from the current level of 32.53 per cent to below 30 per cent, but it will be higher than 26 per cent so that it is able to retain the promoter status of the company.

In March 2022, PNB Housing's board approved the Rs 2,500-crore rights issuance and in November last year, the board cleared the draft letter offer that was to be filed with the SEBI.

PNB Housing was looking to raise equity capital worth Rs 4,000 crore and had entered into a deal with joint venture partner Carlyle Group, among other investors, in May 2021.

However, in October 2021, the mortgage lender decided to terminate the Rs 4,000 crore stake sale citing delays due to pending legal proceedings.