No sale of shares, PNB retains promoter status in subsidiary | Popgen Tech


NEW DELHI : Punjab National Bank will continue as promoter of PNB Housing Finance Ltd (PNBHFL) even after the mortgage lender completes its rights issue, a senior executive said.

The public sector bank has already got the Reserve Bank of India’s approval to issue up to 500 crore for subscription to shares of PNBHFL in the proposed rights issue up to 2,500 crore, expected by December.

“Post-rights issue, the bank’s holding (in PNBHFL) will drop below 30%, but will be kept above 26% so that the bank retains promoter status,” said id -managing director Atul Kumar Goel in an interview.

Last year, private equity firm Carlyle Group and associates had sought to acquire a controlling stake of more than 50% in PNBHFL through 4,000 crore preferential issue of equity and warrants on 390 shares. However, the matter was terminated due to valuation issues and delays due to legal proceedings. It was very apparent that PNB wanted out of the management of its housing finance arm.

“Currently, the bank has no plans to sell its stake in PNBHFL,” Goel said. He, however, added that PNB will continue with its monetization plans, as some non-core activities were identified after the merger of Oriental Bank of Commerce and United Bank of India with PNB.

“After the merger, we have rationalized our existing networks of branches, ATMS, offices etc. However, there is some scope for monetization,” Goel said.

“As far as the sale of shares in non-core investment is concerned, these will be taken up for consideration in due course and we will update the interested parties in due course as required by the regulatory agencies,” he added. .

PNB has been looking to monetize its non-core assets including stakes in UTI AMC, life insurance ventures and an asset reconstruction company

“We have planned to sell the shares (in UTI AMC) in single or multiple tranches. Only after the necessary approvals, we will take a suitable decision on the sale of the shares in lump sum or in tranches based on the market scenario and approach the interested parties,” said Goel.

PNB is also looking to expand its presence in geographies with poor branch penetration. The bank currently has more than 10,000 branches covering most geographical areas. Goel said the bank’s focus will be on organic business growth through strengthening its internal operations to generate more revenue.

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