Issue Highlights
Issue Period
|
25/10/16-27/10/16
|
Price Band (Rs.)
|
750-775
|
Issue Size(shares)
|
3,87.09,677
|
Issue Size (Rs. crore)
|
3,000
|
Issue Type
|
100 % Book Built
|
Face Value (Rs.)
|
10
|
Listing
|
BSE, NSE
|
Industry
|
Housing Finance
|
Registrar
|
Link Intime India Pvt. Ltd.
|
Minimum Bid Quantity
|
19
|
Maximum Retail Subscription
|
Rs. 1,91,425 (13 lots)
|
BRLM
|
BOA Merrill Lynch, JP Morgan India, JM Financial consultants, Morgan Stanley,
Kotak Mahindra capital Co. Ltd.
|
# derived figure
Issue Details
Offer for Sale: Nil
Fresh Issue: 3,87,09,677 #
Equity Shares
Outstanding Prior to the Issue: 12,69,23,000
Equity Shares Outstanding After The Issue #:
16,56,32,680
Objects of the Issue
(1)
To
augment the capital base to meet future requirement
(2)
General corporate purposes & issue related
expenses
Company Profile
PNB housing finance,
promoted by Punjab National bank, is the 5th largest housing finance
company in India in the loan-portfolio term. The company offers housing loans
like NRPL (Non Residential Premise Loans) LRD (Lease Rental Discounting) ,CTL (Corporate
Term Loans) etc for various housing need
and non-housing loans in the form of LAP
(Loan Against the Property). Around 87 % of the total loans disbursed are
retail housing loans and less prone to default.
The company runs its
operations through 47 branches and 16 processing hubs.
The corpus is 94% in
loans and 6 % investments. It has got
whopping loan portfolio growth figure of 62 % for past 4 years.
The loan portfolio
constitutes 13 % fixed interest loan and
87 % variable interest loan
Risks & Threats
o A sudden hike in interest rate is difficult
to pass on its customers, and not at all possible to pass on to those with
fixed interest loans
o High interest regime causes a downward
pressure on NII
o
The
prohibition of penalties on loan pre-payment
makes it easier to customers to switch the loan if cheaper interest rates are
available elsewhere
o
Lower
interest rates means a higher principal component (and a lower interest
component) which reduces company’s total loan
o Portfolio whereas higher interest rates curbs
the overall housing loan demand in an economy
o Self employed people constituted around 23 %
of the loan portfolio and this group is considered as a higher credit risk one
o Stiff competition from HFCs, NBSCs and
commercial banks
o Recent slowdown in corporate credit growth
had forced banks to aggressively pursue the housing finance market and thus
posing a strong competition to HFCs.
o In case of a big real estate meltdown, the
expected value of the collateral can’t be recovered
Strengths & Opportunities
o Housing loan penetration is still in its
nascent stage and a huge potential lies ahead
o Rapid urbanization and tax benefits are
prominent factors for higher HF loans
o Government policies like housing for all and
smart cities holds huge opportunities
o India’s high population growth rate and
changing demographics where working young working class opts early to settle
with his own home
o Housing Finance companies are slowly
capturing housing finance market from commercial banks to the extent of 37 % of
the total housing finance market.
o Gross NPAs are just .2 % of the total loan
portfolio
Financial Profile
Parameter FY 16
|
Value
|
Post Issue PE Multiple
|
39.19
|
PEG Profit 4 Year
|
.9
|
Net Profit margin %
|
12.13
|
Return on Equity %
|
15.28
|
ROCE %
|
12.39
|
CAGR Profit %
|
43.41
|
CAGR Sales
|
55.55
|
Post Issue Price to Book
Multiple
|
5.99
|
EV/ EBITDA
|
15.6
|
Comparison with the listed Peers #
NPM (%)
|
ROCE(%)
|
ROE(%)
|
PE
|
PEG
|
PB
|
|
PNB Housing Finance
|
12.13
|
12.39
|
15.28
|
39.19
|
.9
|
5.99
|
HDFC Ltd.
|
22.95
|
4.79
|
20.78
|
20.03
|
1.18
|
4.25
|
LIC Housing Fin Ltd.
|
13.39
|
1.62
|
18.15
|
17.86
|
1.1
|
3.22
|
Gruh Finance
|
19
|
2.51
|
29.16
|
46.39
|
2.38
|
14.65
|
Repco Home
|
17.04
|
2.45
|
15.71
|
31.54
|
1.25
|
4.92
|
# moneycontrol data
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