Punjab National Bank Board Greenlights Rs 7,500 Crore Capital Boost, Shares Rise

On Thursday, December 28, the Board of Directors of Punjab National Bank gave the nod for a substantial capital infusion, approving the raising of equity capital amounting to Rs 7,500 crore during the fiscal year 2024-25.

The decision, disclosed in a regulatory filing, outlined the bank's strategy to execute the capital injection in one or more tranches. The channels for this financial reinforcement include Qualified Institutions Placement (QIP), Follow-on Public Offer (FPO), or any other permissible mode, either individually or in combination.

The move aligns seamlessly with the regulatory framework, demonstrating PNB's commitment to compliance with the provisions of applicable Acts, Regulations, and Guidelines. The bank emphasized that the execution of this plan is contingent upon the receipt of necessary approvals.

The timing of this infusion comes on the back of PNB's impressive financial performance in the September quarter. The bank reported a staggering 327% year-on-year rise in net profit, soaring to Rs 1,756 crore compared to Rs 411.27 crore in the corresponding quarter of the previous financial year.

Furthermore, the bank's net interest income (NII) surpassed expectations, standing tall at Rs 9,923 crore. PNB's prudent approach was evident in its provisions for the quarter, which amounted to Rs 3,444, showcasing a reduction compared to the previous quarter and the corresponding period of the preceding year.

One of the important indicators of PNB's financial health, the gross non-performing assets (NPAs) ratio, registered a noteworthy decline to 6.96% as of September 30. This was a significant drop from the 7.73% reported in the previous quarter and a marked improvement from the 10.48% recorded in the same period of the preceding financial year. In absolute terms, gross NPAs were reported at Rs 65,563.12 crore by the end of Q2FY24.

Investors closely monitoring PNB's performance witnessed the shares of the bank trading near the flatline at Rs 95.65 per share as of 10:20 am on the National Stock Exchange (NSE). The market's response indicates a cautious yet steady outlook, reflecting the bank's measured approach to strengthening its financial foundation.