India's Carlyle-backed PNB Housing Finance files for IPO
PNB Housing Finance, the mortgage lender subsidiary of India's state-run Punjap National Bank that is backed by The Carlyle Group, has filed for a INR25 billion ($370 million) IPO.
The offering will be composed entirely of newly issued shares, according to the prospectus; the number of shares and the pricing have not yet been announced. PNB Housing will use the majority of the proceeds to augment its capital base, in order to meet regulatory requirements. The remainder, not more than 25% of the net proceeds, will be used for general corporate purposes.
Currently Punjab National Bank holds 64.7 million shares in the company, or an approximately 51% stake. The remaining 49% is held by Carlyle, which acquired the stake when it bought Destimoney Enterprise, a portfolio company of New Silk Route Advisors, last year for $257 million, according to AVCJ Research. Carlyle made the purchase through its vehicle Quality Investments Holdings.
Founded in 1988, PNB Housing was India's fifth largest housing finance company (HFC) by loan portfolio as of September 2015, and had the second largest amount of public deposits in an HFC in India as of March 2015. It operates 47 branches and 16 processing hubs, with a distribution network that includes over 5,000 channel partners across India.
For the year ended March 2016, PNB Housing recorded INR27 billion in revenue, up from INR18 billion the year before. Over the same period, net profit rose from INR1.9 billion to INR3.3 billion, while the company's loan portfolio grew from INR40 billion to INR271 billion.
PNB Housing's non-performing assets (NPAs) accounted for 0.2% of its total loan portfolio as of March 2015, the lowest among India's leading HFCs, according to industry group ICRA; the following year they stood at 0.22%. The relatively low ratio of bad loans could be an advantage in India, where regulators and the government have grown increasingly concerned about the high levels of NPAs in the country's banking system.
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