1 % of PNB Housing Finance IPO fully Subscribed

On 25th Oct, India's fifth-largest housing finance company has made a debut on
Dalal Street, with its initial public offer (IPO) opened for subscription. PNB
Housing Finance, from the Punjab National Bank (PNB share price- 0.27%)
stable has aimed to raise Rs 3000 crore. The IPO which will close for
subscription on October 27 is going to be the second largest issue of 2016
after ICICI Prudential Life Insurances Rs 6057-crore IPO. So far, around 22
IPOs have hit markets this year.
The IPO of PNB Housing Finance kicked off, logging bids for 2.63 lakh shares
in the first half-an-hour of the bidding process. This was roughly 1 per cent of
the 2.8 crore shares the housing lender has put on the block. On Monday, the
company witnessed spectacular response from anchor investors, who bade
for 30-times the number of shares from the anchor book.
At the upper end of the price band of Rs 750-775 apiece, the IPO is expected to
fetch up to Rs 3,000 crore. The issue constitutes entirely fresh issue of equity
shares. Thus, the funds raised will augment tire-I capital of the home financier,
taking the CAR well above the regulatory requirement of 12 per cent and aid
future business growth.
At the upper end of the price band at Rs 775, the issue is valued at 2.5 times its
post-dilution adjusted book value of Rs 311 per share on a FY16 basis. The
valuation of the company seems reasonably attractive as compared with the
peers with largely similar RoAs including LICHF (trading at 3.3 times its FY16
ABV), GICHF (2.5 times), CanFin Homes (5.6 times).
Considering the healthy financials, top quartile return ratios and total growth
in the housing finance sector driven by governments housing for all and
Smart Cities programme, it is believed that PNB Housing Finance offers an
ideal investment opportunity. As a result, investors can subscribe to the issue.

After IPO, its parent company PNB will reduce its stake to around 38-39
percent of issued share capital. Thus, PNB Housing Finance won't stay either a
subsidiary of PNB or a government company. Nonetheless, after the issue,
PNB will still be its single largest shareholder with 26 percent or 33 percent
holding of the post-issue equity share capital.
Established in 1988, the company has 47 branches across northern, western
and southern regions of India and 16 processing hubs and 7110 channel
partners all over different location in India. It initially offers customers
housing loans for purchase, extension construction or improvement of
residential properties or for purchase of residential plots and non-housing
loans in the form of loans against property (LAP) to property-owning
customers through mortgages over their current property and any
additional security.

Related Links :
All you need to know about PNB Housing Finance IPO

Disclaimer
The investment advice or guidance provided by way of recommendations, reports or other ways are solely the personal
views of the research team. Users are advised to use the data for the purpose of information and rely on their own
judgment while making investment decision.
Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022

Disclosure
Dynamic Equities Pvt. Ltd. is a member of NSE, BSE, MCX SX and a DP with NSDL & CDSL. It is also engaged in Investment
Advisory Services and Portfolio Management Services. Dynamic Commodities Pvt. Ltd., associate company, is a member of
MCX & NCDEX. We declare that our activities were neither suspended nor we have defaulted with any stock exchange
authority with whom we are registered. SEBI, Exchanges and Depositories have conducted the routine inspection and
based on their observations have issued advise letters or levied minor penalty on for certain operational deviations.
Answers to the Best of our knowledge and belief of Dynamic/ its Associates/ Research Analyst: DYNAMIC/its Associates/
Research Analyst/ his Relative:
Do not have any financial interest / any actual/beneficial ownership in the subject company.
Do not have any other material conflict of interest at the time of publication of the research report
Have not received any compensation from the subject company in the past twelve months
Have not managed or co-managed public offering of securities for the subject company.
Have not received any compensation for brokerage services or any products / services or any compensation or
other benefits from the subject company, nor engaged in market making activity for the subject company
Have not served as an officer, director or employee of the subject company

Article Written by
Madhurima Chowdhury