PNB Housing to hit market on Tuesday

PNB Housing Finance’s Rs 3,000-crore initial public offering (IPO) will hit the market on October 25.

The mortgage lender will issue new shares in the price band of Rs 750 to Rs 775 a share, which will led to a dilution of around 23 per cent. The IPO proceeds will help the company augment its capital base to fuel growth.

Currently, state-owned Punjab National Bank (PNB) and private equity player Carlyle Group own 51 per cent and 49 per cent, respectively, in PNB Housing. After the IPO, PNB’s and Carlyle’s shareholdings will drop to 38 per cent and 37 per cent, respectively. At the top end of the price band, PNB Housing will be valued at Rs 13,000 crore.

Shares of PNB on Tuesday closed 2.93 per cent higher at Rs 140.65, valuing the lender at Rs 29,930 crore.

Initially, PNB Housing planned to raise around Rs 2,500 crore. However, on the back of “strong investor demand”, the company increased its issue size to Rs 3,000 crore. Investment bankers said the housing finance company took advantage of Sebi norms that allowed around 20 per cent change in issue size even after filing an offer document.

PNB Housing’s IPO is being handled by Kotak Investment Banking, Morgan Stanley, JM Financial, JP Morgan and Bank of America-Merrill Lynch. As of June 30, the lender’s loan portfolio stood at Rs 30,900 crore, with retail housing loans constituting a bulk of its portfolio. PNB Housing’s loan portfolio has increased at a compound annual growth rate of 62 per cent between 2012 and 2016.

Varun Beverages’s IPO likely on Oct 26

Varun Beverages’ initial public offering (IPO) could hit the market on October 26.

The company is one of the largest bottlers for PepsiCo. The IPO size could be around Rs 1,200 crore.

“The company has obtained Sebi nod for its IPO on Tuesday. The IPO could open on October 26 and close on October 28,” said a banker handling the issue.

Varun Beverages had filed for its offer document with market regulator Sebi in June. Kotak, Axis Capital, Citic CLSA and Yes Securities are managing the IPO for Varun Beverages.

Varun Beverages and PNB Housing IPOs are joining the boom in the IPO market. In the first nine months of 2016, more than Rs 20,000 crore had been mobilised via IPOs, the most since 2010.

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