PNB Housing Finance raises Rs 2,500 cr from LIC via NCD, its 2nd this year

Life Insurance Corporation of India
Mortgage lender PNB Housing Finance has raised Rs 2,500 crore from state-owned Life Insurance Corporation (LIC) through secured redeemable non-convertible debentures (NCDs), making it the second such issuance of the housing finance company in this fiscal year (FY20).


“This issuance is through private placement basis with a door-to-door tenure of 10 years and the proceeds will be utilised by the company for its normal course of business operations,” the housing finance company said.


The first issuance of NCDs of Rs 500 crore was subscribed by a foreign bank. “The amount raised from LIC will be used by the housing finance company to enhance their liquidity position and strengthen asset liability management position,” said Sanjaya Gupta, managing director of PNB Housing Finance.


PNB Housing Finance has a capital adequacy ratio of 15.67 per cent as of September 30.


In this fiscal year, PNB Housing Finance has raised Rs 27,000 crore, of which Rs 6,379 crore is through fixed deposits and Rs 5,899 crore through securitisation of loan portfolios via the direct assignment route. It has raised Rs 3,000 crore through NCDs and Rs 1,211 crore through external commercial borrowing.


The housing finance company has, however, cut its exposure to commercial papers to around 5 per cent of the total resources.


In Q2FY20, the company reported a profit before tax of Rs 426.1 crore, up 14 per cent from Rs 372.5 crore in Q2FY19. It reported a 45 per cent rise in net profit at Rs 366.8 crore in the second quarter ended September of this fiscal.


While net interest income rose 36 per cent year on year to Rs 628.4 crore, the net interest margin improved to 3.19 per cent from 2.72 per cent a year ago. The gross non-performing assets (NPAs) stood at 0.84 per cent of the loan assets as of September 30, against 0.45 per cent a year ago. Net NPAs stood at 0.65 per cent, as against 0.35 per cent a year ago.


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