Goldman Sachs, PremjiInvest look to invest in PNB unit

Punjab National Bank. Photo: Livemint

Goldman Sachs Group, PremjiInvest and the family office of Sunil Kant Munjal are in advanced talks to invest in PNB Housing Finance Ltd, said two people directly aware of the discussions.

PNB Housing is looking to raise as much as 2,000 crore through the “limited preference” route, under which a maximum of five investors can participate, the people said on condition of anonymity.

Two of its existing shareholders, private equity firms General Atlantic and Carlyle, will also infuse funds into the mortgage lender, the people said, adding that the company will use the funds to bolster its balance sheet and enhance lending to homebuyers and property developers.

“The transaction is expected to be completed by October and there is a possibility that its parent, Punjab National Bank, may also participate in the funding round, though the potential investment is still under contemplation,” said one of the two people cited earlier.

Spokespeople for PNB Housing Finance and Goldman Sachs declined to comment, while emails seeking comments from Carlyle, General Atlantic, PremjiInvest and Sunil Munjal, chairman of Hero Corporate Services, remained unanswered until press time. PremjiInvest is the fund managed by the family office of billionaire Azim Premji.

The equity infusion into PNB Housing Finance, approved by its board in July, comes at a time when the real estate sector is grappling with sluggish sales and unfinished projects due to a liquidity squeeze that has forced many developers to bring in a partner to complete projects, or sometimes even abandon them. For real estate-focused financiers, the situation has led to asset-liability mismatches that threaten their survival.

(Graphic: Paras Jain/Mint)
(Graphic: Paras Jain/Mint)

On Thursday, Altico Capital, a financier to real estate companies, defaulted on an interest payment of 19.9 crore. Earlier, Dewan Housing Finance Ltd defaulted on interest or principal payments on a series of term loans and market-linked instruments.

PNB Housing Finance was set up in 1988 as a deposit-taking housing finance company by state-run Punjab National Bank.

In December 2009, PNB sold 49% in the company to an entity owned by private equity fund NSR Partners, which during fiscal 2017 sold the stake to Quality Investment Holdings, part of the Carlyle Group.

Assets under management (AUM) of PNB Housing Finance have grown at an annual average pace of around 45% from fiscal 2016 to fiscal 2019, reaching 84,722 crore as on 31 March, according to its corporate filings. This has been driven by growth across its retail and wholesale portfolio, although the pace of growth in the latter segment has been faster on account of the low base.

This article was first published on livemint.com

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.