Shares of India’s PNB Housing Finance Ltd fell 5% on Monday to their lowest since early June after the mortgage lender scrapped a fund-raising deal with a group of investors, led by private equity firm Carlyle Group.
PNB Housing Finance said late Thursday that it had ended the deal, which was announced in May to issue shares worth 40 billion rupees ($533.2 million) to Carlyle-led investors, after a months-long legal battle with India’s markets regulator, the Securities and Exchange Board of India (SEBI).
The deal had been challenged by the SEBI following an institutional investment advisory firm’s statement that the deal was unfair to minority shareholders. The regulator had asked the company to stall it until it undertook an independent valuation.
PNB Housing Finance had challenged SEBI’s order by approaching India’s Securities Appellate Tribunal (SAT). SAT in August delivered a split verdict, restricting the company from disclosing the results of shareholder votes on the deal.
“There continues to be no visibility or certainty as to the timeline for judicial determination of the legal issues,” PNB Housing Finance said on Thursday.
ICICI Securities said in a note that concerns related to asset quality and growth have re-emerged with deal being called off.
PNB Housing Finance’s stock had more than doubled to a two-year high of 925 rupees after the deal was announced in May. It has since given up a portion of those gains and last traded at 606.75 rupees.