PNB Housing Finance board approves Rs 5,000 crore fundraise; check stock reaction

Shares of PNB Housing Finance dropped nearly 3 percent in early trade on June 23 post board approval for raising up to Rs 5,000 crore. At 10:24 am, the PNB Housing Finance stock was trading 2.73 percent lower at Rs 594.40 on NSE.

Details about the board approval

The housing finance company in a BSE filing dated June 22, stated that it has received board approval for issuance of non-convertible debentures worth up to Rs 5,000 crore in tranches on private placement basis.

Recent developments in the company

PNB Housing Finance in an interaction with Nirmal Bang in June said the demand trends remain healthy and it does not see a challenge in sustaining growth. Its focus is to grow the affordable housing book aggressively and to grow the retail book to Rs 1 lakh crore going forward.

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The company has set up different verticals for collection to increase efficiency, resulting in overall improvement in the asset quality. The management reiterated that the asset quality improvement trajectory is likely to continue going forward. Moreover, the management remains positive about maintaining net interest margins (NIMs) and spread of 3.5 percent and 2.5 percent respectively.

Brokerage Targets

Motilal Oswal recommended ‘neutral’ rating on PNB Housing Finance with a target price of Rs 525 in its research report dated May 19, 2023.

Stock Performance

PNB Housing Finance stock has given a return of 55.33 percent over the last six months. Thus, considerably outperforming the benchmark Nifty50 index which has given a return of 5.42 percent over the same duration.

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