NEW DELHI: The initial public offering (IPO) of PNB Housing Finance kicked off on Tuesday, logging bids for 2.63 lakh shares in the first half-an-hour of the bidding process. This was roughly 1 per cent of the 2.8 crore shares the housing lender has put on the block.
The company on Monday saw spectacular response from anchor investors, who bade for 30-times the number of shares from the anchor book.
At the upper end of the price band of Rs 750-775 apiece, the IPO is expected to fetch up to Rs 3,000 crore.
The issue comprises entirely fresh issue of equity shares. The funds thus raised will augment tire-I capital of the home financier, taking the CAR well above the regulatory requirement of 12 per cent and aid future business growth.
“At the upper end of the price band at Rs 775, the issue is valued at 2.5 times its post-dilution adjusted book value of Rs 311 per share on a FY16 basis. The valuation of the company appears reasonably attractive, compared with the peers with largely similar RoAs such as LICHF (trading at 3.3 times its FY16 ABV), GICHF (2.5 times), CanFin Homes (5.6 times),” Centrum Broking said in a note.
“Considering the healthy financials, top quartile return ratios and overall growth in the housing finance sector backed by government’s ‘housing for all’ and ‘Smart Cities’ programme, we believe PNBHF offers an ideal investment opportunity. Hence, investors can subscribe to the issue,” the brokerage said.