Shares of PNB Housing Finance have hit upper circuit for the fourth consecutive day. The stock has hit a fresh 52-week high of Rs. 763.15 per share on the NSE. In four days, the scrip of the housing finance major has rallied by a huge 72 percent, considering the opening price of Rs. 442 per share on May 31, 2021.
Why the sharp rally in PNB Housing Finance?
After PNB Housing Finance revealed in a BSE filing on May 31, 2021 that the board of the housing finance company has given a go ahead to the capital raising plan amounting to Rs. 4000 crore via preferential issue of equity and warrants which is led majorly by The Carlyle group contributing 80%, the scrip has been gaining strength.
The capital raising plan of the company is aimed at increasing the capital adequacy, reduce gearing as well as boost up growth in retail segment covering affordable housing schemes such as the Unnati.
Also after the SEBI's takeover regulations are in place, the deal would lead to a mandatory open offer by Pluto Investments for the acquisition of up to 26% shares of PNB Housing finance from public shareholders.
Now interestingly, the participation of Aditya Puri, former MD and CEO of HDFC Bank in the capital raise plan of PNB Housing Finance has drawn huge investor interest. In due course of time, Aditya Puri shall be nominated to the PNB Housing Finance Board as a Carlyle nominee Director. Being at the top of the organisational structure, Mr. Puri drove HDFC bank to become the largest private bank in the country.
On the fund raise, Hardayal Prasad, Managing Director and CEO of PNB Housing Finance, said, "This fund raise, and Carlyle's continued support, puts us in a strong position to benefit from the growing opportunities in the housing finance sector including in the affordable housing loans and self-employed segments, where we have developed differentiated capabilities in terms of distribution, underwriting and customer service. The current fund raise and planned strengthening of the Board and management team will enable us to accelerate our strategic priorities, including further expanding our footprint, driving the Company's digitalization, improving our operating model and customer engagement."