No capital infusion by Punjab National Bank in housing finance subsidiary

. The housing financier needs the funds to augment its capital base as well as to meet its general corporate purposes.

Punjab National Bank (PNB) will not participate in capital raise plans of its housing finance subsidiary, PNB Housing Finance, but the company will continue to scout for raising equity from other sources, according to a regulatory filing.

In August last year, 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 infuse capital into PNB 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.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel