PNB board okays Rs 500 crore infusion in PNB Housing Finance
The public sector bank board has approved the bank’s participation in the proposed rights issue for an amount up to 500 crore in order to retain the bank’s shareholding in the mortgage lender at 30% or below but above 26%.
An above 26% holding would help
to retain its status as promoter in Finance.
PNB holds around 32.6% stake in the housing sector lender.
The bank however needs Reserve
‘s approval for subscribing to the rights issue.
Earlier, in early 2021 the Reserve Bank of India did not allow PNB to invest in PNB Housing Finance as the central bank was in favour of keeping the bank’s capital well above the regulatory norm.
PNB’s capital adequacy ratio stood at 14.5% at the end of March this year against 14.32% a year back. The minimum requirement is 11.5% which includes a capital conservation buffer of 2.5%.
PNB Housing finalised the rights issue in March to raise up to Rs 2,500 crore. The announcement came nearly a year after its scrapping of Rs 4,000 crore fundraising plan involving preferential stock allotment, largely to US private equity major Carlyle Group.