Pulling out from the Rs 4,000-crore Carlyle-led deal was a conscious choice of PNB Housing Finance as the company did not want to entangle in a protracted legal battle and lose focus on the lending business, its Managing Director and CEO Hardayal Prasad said.

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Last month, the company said it has decided not to proceed with the Rs 4,000-crore capital infusion deal led by Carlyle as a legal battle will not be in the best interests of the company and its stakeholders.

The deal was finalised on May 31. Soon after, it mired into a controversy with regards to the valuation of the shares being offered to the investors. Subsequently, the matter reached the Securities Appellate Tribunal (SAT) after the intervention of markets regulator Sebi.

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"If you look at it, there is nothing that we did wrong. We followed the policy of the Sebi, the LODR instructions, we tried to do everything. It was only a question of interpretation.

"But, it was looking like a long-drawn process due to hurdles in legal approvals," Prasad told PTI in an interview.

He said the split verdict of the SAT also proves that it was a matter of interpretation only as the company's contention was vindicated by one of the judges in the matter, reiterating: "I don't think we did anything wrong".

Prasad added that one of the judges, the presiding officer, gave the judgment in the company's favour. "But, we are very clear that we don't want any protracted legal battle. We want to concentrate on our work and go ahead."

He said a significant amount of bandwidth is utilised when you are going to do it and it would have been a slightly long-protected legal battle.

"I am not in that business, we are in the business of lending, in the business of financing. What is the point in remaining distracted by these kinds of things. So, we decided that okay they are the regulator and we decided to go ahead with the pull-back (from the deal)," Prasad said.

After the split verdict of the SAT in August, Sebi had approached the Supreme Court. However, the apex court dismissed Sebi's appeal in late October as it became infructuous when PNB Housing Finance said it will pull out from the deal.

The company has filed an application to withdraw its appeal to the Securities Appellate Tribunal.

Prasad said the company is much in the need of the desired capital and it will look for all the venues to raise money, be it through borrowings, qualified institutional placement (QIP), rights issues or preference issues.

"Whether we do it through borrowings or QIP, preferential issue, rights issue, any other things that we can do, we are keeping everything open and we will see to it and at the right time, we will approach the board to permit us to raise the money," Prasad said.

He added that the company will continue to look for opportunities.

"We remain engaged with everybody. See how we can move forward in terms of capital raising. We require to raise the capital, despite a solid capital adequacy ratio, and the gearing position.

"But, we would still like to raise capital to enable us to grow even faster than we are growing," he said.

Right now, all stakeholders of the company remain supportive of the company. They know that the capital is required, they know that the company has a great, bright future, Prasad added.

They have also seen that in the past nine quarters, there has been a slow and steady movement on a lot of fronts.

"So, we would do it, since they are all supportive and they understand that the company requires it. We will look at all options that are there in terms of raising the money," Prasad said.

State-owned Punjab National Bank (PNB) is the company's promoter with a 32.6 per cent holding in the company.

On being asked what was PNB's opinion on pulling out from the deal, he said: "We explained to them that this is the reason and we would like to pull back from the deal. Because of the protracted legal nature, it is not taking us anywhere and it is distracting the overall focus of the business."

All of them agreed that this is the right thing to do, Prasad added.

In the second quarter ended September 2021, the company posted a net profit of Rs 235 crore, down by 25 per cent from a year ago, mainly on account of a fall in interest income and higher provisioning for bad loans.

(Edited by : Yashi Gupta)

First Published:Nov 7, 2021 3:39 PM IST