GA, Värde cancel planned investment in India's PNB
General Atlantic and Värde Partners have terminated a planned INR18.5 billion ($267 million) investment in PNB Housing Finance, the publicly listed mortgage subsidiary of India’s Punjab National Bank (PNB).
The investors had agreed to buy 10.9 million shares each from PNB, which would have seen Värde gain a 6.5% stake and General Atlantic raise its holding from 8.5% to 15%. With the termination of the investment, PNB will retain its existing stake of 32.8%.
According to a regulatory filing, General Atlantic was required to complete its investment by May 15, including acquiring all necessary regulatory approvals. While the firm received approval from the Competition Commission of India and the National Housing Bank by the deadline, the Reserve Bank of India did not give its assent.
PNB Housing did not provide as much detail about the cancellation of the Värde investment, describing the decision as a mutual agreement in a separate filing. Following the termination of the agreements, PNB will remain the sole promoter of PNB Housing.
PNB Housing's share price dropped following the announcement of the deal's cancellation, opening at INR742.90 on March 17 after closing at INR759 the previous day and falling further to around INR730 in early morning trading.
PNB Housing was founded in 1988 and claims to be India's fifth-largest housing finance company by assets, and second-largest by deposit book size. It offers a range of products, primarily covering mortgages but including non-home loans and construction finance for real estate developers.
The company reported INR623 billion in assets under management for the year ended March 2018, up from INR415 billion the year before. Over the same period revenue grew from INR39 billion to INR55 billion, while net profit rose from INR5.2 billion to INR8.3 billion.
General Atlantic has been an investor in the lender since 2016, when it participated in the company's INR30 billion IPO as one of 45 anchor investors. The Carlyle Group is also a major backer, having acquired a 49% stake when it purchased Destimoney Enterprise from New Silk Route Advisors in 2015. Carlyle still held a 37% stake in the company as of March 2018.
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