GE Cap, others in race for PNB’s housing finance subsidiary
GE Capital, Carlyle, New Silk Route and Tata Capital are in the race for a significant stake in Punjab National Bank’s housing finance company.
By Reena Zachariah, ET Bureau |
MUMBAI: GE Capital, Carlyle, New Silk Route and Tata Capital are in the race for a significant stake in Punjab National Bank���s housing finance company. The second-largest state-owned bank is planning to sell a 49% stake in its subsidiary, PNB Housing Finance.
Five bidders have been short-listed and the due diligence is likely to be completed in 10 days, according to investment banking sources. ���We have given the mandate to a merchant banker and are awaiting their report,��� said a senior Punjab National Bank official.
PNB Housing Finance has an asset base of Rs 2,000 crore. The mortgage lender, which has 28 branches across major cities, reported a net profit of Rs 40.59 crore for the year ended March 31, 2008.
Punjab National Bank had to recently call off a proposal to sell another subsidiary, PNB Gilts, due to lukewarm investor response. ���They have an easy access to funds because of their parent company,��� said a person close to the development.
There is an increasing interest in the housing loan market in India, with a sharp rise in housing loan disbursements. The share of housing loans in total bank credit rose sharply from 3.2% in 1998-99 to 12-13% in 2007-08. And in the retail loan segment, the proportion of housing loans rose sharply from 27.7% at the end of March 1998 to 54-55% at end-March 2008.
Home loans have grown in excess of 30% over the past few years. But the pace is expected to slow to 8-10% this year. The global private equity firm Carlyle Group invested $28 million in the Chennai-based Repco Home Finance, a subsidiary of Repatriates Co-operative Finance and Development Bank, last year. The French financial services major BNP Paribas acquired a stake of nearly 50% in Sundaram Home Finance for Rs 196.98 crore and AIG Capital bought 75% in Chennai���s Vivek Hire Purchase. Barclays and Societe Generale bought into Chennai���s Rank Investments and Apeejay Finance respectively.
Five bidders have been short-listed and the due diligence is likely to be completed in 10 days, according to investment banking sources. ���We have given the mandate to a merchant banker and are awaiting their report,��� said a senior Punjab National Bank official.
PNB Housing Finance has an asset base of Rs 2,000 crore. The mortgage lender, which has 28 branches across major cities, reported a net profit of Rs 40.59 crore for the year ended March 31, 2008.
Punjab National Bank had to recently call off a proposal to sell another subsidiary, PNB Gilts, due to lukewarm investor response. ���They have an easy access to funds because of their parent company,��� said a person close to the development.
There is an increasing interest in the housing loan market in India, with a sharp rise in housing loan disbursements. The share of housing loans in total bank credit rose sharply from 3.2% in 1998-99 to 12-13% in 2007-08. And in the retail loan segment, the proportion of housing loans rose sharply from 27.7% at the end of March 1998 to 54-55% at end-March 2008.
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Home loans have grown in excess of 30% over the past few years. But the pace is expected to slow to 8-10% this year. The global private equity firm Carlyle Group invested $28 million in the Chennai-based Repco Home Finance, a subsidiary of Repatriates Co-operative Finance and Development Bank, last year. The French financial services major BNP Paribas acquired a stake of nearly 50% in Sundaram Home Finance for Rs 196.98 crore and AIG Capital bought 75% in Chennai���s Vivek Hire Purchase. Barclays and Societe Generale bought into Chennai���s Rank Investments and Apeejay Finance respectively.
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