PNB Housing takes losing run to 3rd day, tanks 4%

A proxy advisory firm has raised questions on the NBFC’s decision to raise funds by way of preferential issue of shares instead of a rights issue, and termed it an “unfair transaction”.

Following the development, the stock fell 4.43 per cent to hit a low of Rs 774 on BSE. With this, the scrip took its three-day fall to 12 per cent.

A senior executive of the public sector bank (PSB) told IANS that though there was no regulatory issues with the transaction, more clarity could be sought on the contours of the deal. PNB is expected to address some of the concerns raised on the deal at the shareholders’ meet scheduled next month.

On May 31,

announced the board approval to raise up to Rs 4,000 crore in a preferential issue, led by the existing investor Carlyle, subject to regulatory and shareholders’ approval.

Proxy advisory firm Stakeholders Empowerment Services (SES), in a report, has raised a number of questions on the proposed deal, wondering if Punjab National Bank (PNB) has willingly surrendered control without extracting a fair compensation.

Asking if PNB sacrificed over Rs 2,000 crore, the report said it is an “unfair transaction, against public shareholders and PNB”. The deal is ‘ultra vires’ to the Articles of Association (AoA), it added.

Under the proposed deal, Rs 3,200 crore is to be raised through equity shares and Rs 800 crore by issuance of warrants. Notably, PNB Housing Finance has not raised any equity capital in the past three years, except equity shares issued under the Employee Stock Option Plan.

An extraordinary general meeting (EGM) of the shareholders of the housing financier is slated for June 22 to seek their approval for the allotment of shares and warrants to the proposed investors, among others.