Punjab National Bank (PNB) will not participate in capital raise plans of housing finance subsidiary, PNB Housing Finance, but the company will continue to scout for raising equity from other sources, according to a regulatory filing.
Last year in August, PNB Housing Finance Ltd had informed about its plan to raise tier I capital up to Rs 1,800 crore through various modes including QIP, preferential issue of shares or a rights issue.
To this, PNB was awaiting approval from the Reserve Bank to strain capital into Housing Finance.
“In this context, Punjab National Bank has communicated that it shall not be participating in the capital raise plans of the company. However, the company will continue to pursue the proposed capital raising plan through permitted modes,” PNB Housing Finance said in a regulatory filing.
The housing financier needs the funds to augment its capital base as well as to meet its general corporate purposes.
Earlier this month, PNB managing director and CEO S S Mallikarjuna Rao had said the bank was confident of getting RBI’s nod for infusing capital into the subsidiary.
PNB Housing Finance Managing Director & CEO Hardayal Prasad in an analyst call in January had also expressed confidence that the RBI will approve the proposal.
As of December 31, 2020, Punjab National Bank held 32.65 per cent stake in PNB Housing. PNB –as a promoter– has to remain invested in the company with a minimum requirement of 26 per cent.
Foreign portfolio investors Investment Opportunities V Pte. Ltd and General Atlantic Singapore Fund Fii Pte Ltd held 9.92 per cent and 9.87 per cent stake respectively as of December 2020. The total public shareholding in the company stands at 67.35 per cent.