PNB puts its holding in Icra on the block

Mumbai: Punjab National Bank has put on block its 3.45% stake in rating company Icra in an attempt to raise the much needed capital to stay afloat. PNB is likely to fetch over Rs 110 crore through this transaction, said people aware about the development. The bank has said that the last day of submitting the bid is June 27.

The government owned bank has suffered a huge loss of over Rs 13,000 crore on account of a large fraud by Nirav Modi and his uncle Mehul Choksi at its Brady branch. Moody’s Investment Company India and Moody’s Singapore jointly have 50.55% stake in Icra, the second largest rating company after Crisil.

PNB has appointed PNB Investment Services as investment banker for this transaction. PNB had earlier said that it was lower its stake in PNB Housing Finance, PNB Asset Management Company, PNB Gilts and PNB Metlife Insurance to raise capital.


PNB’s minimum capital requirement had fallen below the regulatory prescription for March 2018 which also resulted in rating agencies downgrading the bank’s ratings. PNB’s common equity Tier-1 capital stood at 5.96%, much below the regulatory requirement of 7.375% at end-March 2018. For the fiscal year 2019, all banks are required to maintain CET -1 of 8%.

The bank reported a loss of Rs 13,477 crore in the fourth quarter of March 2018 and its is yet to provide for half of the loss inured on account of Nirav Modi fraud.