PNB Housing Finance, an arm of state-owned Punjab National Bank, has received capital markets regulator Sebi’s go ahead to raise up to Rs 2,500 crore through rights issue of shares.
The housing finance firm, which had filed draft papers with Sebi in December 2022 regarding the rights issue, obtained its ‘observations’ on March 6, which is necessary for any company to launch the issue, an update.
Going by the draft papers, PNB Housing will issue fully paid-up equity shares of the company by way of a rights issue to its existing shareholders for an amount not exceeding Rs 2,500 crore.
The company intends to utilise the net proceeds from the issue towards augmenting its capital base.
Post the rights issue, the shareholding of Punjab National Bank (PNB) as a promoter of the company would come down from the current level of 32.53 per cent to below 30 per cent but it would be higher than 26 per cent so that the bank retains promoter status.
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.