PNB Housing Finance has filed an appeal before the Securities Appellate Tribunal (SAT) to challenge the SEBI's June 18 order to halt its Rs 4,000-crore transaction with a consortium led by private equity major Carlyle.

The consortium includes former HDFC Bank MD and CEO Aditya Puri and private equity funds General Atlantic and Ares SSG.

The development comes after SEBI halted the deal temporarily and directed the mortgage lender to undertake a valuation exercise based on the firm’s articles of association.

"... Company has filed an appeal before the Securities Appellate Tribunal against the letter issued by the Securities and Exchange Board of India on June 18, 2021," PNB Housing Finance said in a regulatory filing on Monday.

SEBI has called the deal "ultra-wires" saying it violates the Article of Association (AOA).

Read here:

SEBI halts PNB Housing Finance's Rs 4,000 crore deal with Carlyle group

The regulator has asked the PNB Housing Finance to not act upon the allotment until the company undertakes the valuation of shares.

“…the notice given on May 31 for Extraordinary General Meeting is “ultra-vires" of Article of Association (AOA) and shall not be acted upon until the company undertakes the valuation of shares as prescribed under 19(2) of AOA, for purpose of preferential allotment, from an independent registered valuer as per the provisions of applicable laws. The said report shall be considered by the Company’s Board while deciding on the preferential issue of shares and warrants,” the SEBI order said.

The shares of PNB Housing Finance were locked in the 5 percent lower circuit at Rs 702.40 per share on Monday after the SEBI's move.

Read here: PNB Housing Finance shares hit 5% lower circuit after SEBI halts deal with Carlyle Group

On May 31, a group of investors led by the Carlyle Group had announced an investment of Rs 4,000 crore in PNB Housing Finance, a listed entity. According to the deal, Rs 3,200 crore was to be raised through equity shares and Rs 800 crore by issuance of warrants.