PNB Housing Finance (PNBHF) Shares Plummet Over 8% to 2-Week Low Following Major Block Deal

• PNB Housing Finance shares dropped 8.12% in today’s intraday trade, reaching a 2-week low of ₹724.55 per share.
• This decline followed a block deal where 6.96 million shares, or 2.68% of the company’s total equity, were traded.
• General Atlantic Singapore Fund FII Pte Ltd. and Asia Opportunities V (Mauritius) Limited were reported to sell shares worth ₹500 crore in the block deal.

PNB Housing Finance shares plummet over 8% following a significant block deal.

Block Deal Impact on PNB Housing Finance

PNB Housing Finance, a prominent player in the housing finance sector, experienced a notable decline in its share price today. The shares fell by 8.12%, reaching a two-week low of ₹724.55 per share. This drop came after a significant block deal where 6.96 million shares, representing 2.68% of the company’s total equity, were traded. The identities of the buyers and sellers were not immediately known.

Details of the Block Deal

According to reports from CNBC-TV18, General Atlantic Singapore Fund FII Pte Ltd. and Asia Opportunities V (Mauritius) Limited were expected to sell shares worth ₹500 crore in PNB Housing Finance through a block deal. The floor price for the deal was set at ₹717 per share, which is a 9% discount to the previous day’s closing price. This significant transaction has evidently impacted the market sentiment, leading to the sharp decline in the share price.

Shareholding Pattern and Market Performance

As per Trendlyne’s shareholding data, General Atlantic Singapore Fund FII Pte Ltd. held a 9.82% stake in PNB Housing Finance, maintaining a stake above 9% since June 2018. Asia Opportunities V (Mauritius) owned a 9.88% stake as of Q4 FY24. General shareholders held the largest stake at 40%, while Punjab National Bank held a 28.1% stake at the end of the March quarter.

Financial Performance and Market Trends

PNB Housing Finance has seen its shares decline by 19% from their six-year high of ₹913.95 in January. Despite this, the company reported a 57% improvement in net profit during Q4, driven by steady demand for home loans and a decline in bad loans. For FY24, profit after tax increased by 44% year-over-year, reaching ₹1,508 crore compared to ₹1,046 crore. Disbursements during FY23–24 grew by 17% YoY to ₹17,583 crore, with Q4 disbursements standing at ₹5,574 crore, marking a 24% YoY and 35% QoQ increase. Assets Under Management (AUM) grew by 7% YoY and 4% QoQ to ₹71,243 crore as of March 31, 2024.

Rating Upgrades and Future Outlook

On Monday, CRISIL upgraded PNB Housing Finance’s long-term debt instruments and bank facilities to ‘CRISIL AA+/Stable’ from ‘CRISIL AA/Positive.’ The short-term bank facilities and debt instruments rating was reaffirmed at ‘CRISIL A1+.’ This upgrade reflects the company’s improving profitability and asset quality metrics. Similarly, CARE Ratings and ICRA also upgraded their ratings for PNB Housing Finance, citing consistent enhancements in the company’s credit profile, driven by improvements in asset quality and a strengthened capitalisation profile.

Conclusion

PNB Housing Finance’s recent block deal has led to a significant drop in its share price, reflecting market reactions to large-scale equity transactions. Despite this, the company’s strong financial performance and recent rating upgrades indicate a positive long-term outlook. Investors should monitor the company’s strategic moves and market conditions closely to make informed decisions.