The shares of PNB Housing Finance were locked in the 20 percent upper circuit at Rs 525.65 apiece on the NSE after the company announced that its board approved a capital raise of up to Rs 4,000 crore, led by entities affiliated to Carlyle Group Inc.

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Pluto Investments S.a.r.l., an affiliated entity of Carlyle Asia Partners IV, L.P. and Carlyle Asia Partners V, L.P. has agreed to invest up to Rs 3,185 crore through a preferential allotment of equity shares and warrants, at a price of Rs 390 per share.

Existing shareholders of the company, funds managed by Ares SSG and General Atlantic, are also participating in the capital raise, PNB Housing Finance said in a regulatory filing.

As part of this transaction, Salisbury Investments Pvt. Ltd., the family investment vehicle of Aditya Puri, Senior Advisor for Carlyle in Asia and the former CEO & Managing Director of HDFC Bank, will also invest in the capital raise.

Aditya Puri is expected to be nominated to the PNB Housing Finance board as a Carlyle nominee director in due course, it said.

PNB will continue to be the promoter and a key stakeholder in the company.

The transaction is subject to customary regulatory approvals as well as shareholder approval. Pursuant to the Securities and Exchange Board of India’s takeover regulations, the proposed transaction will trigger a mandatory open offer by Pluto Investments S.a.r.l. for the purchase of up to 26 percent equity shares of PNB Housing Finance from public shareholders, it said.

“The key objective of raising capital is to augment capital adequacy, reduce gearing and accelerate growth with a focus on retail housing including self-employed and affordable housing loans such as the Unnati segment,” the company said.

Assuming full capital infusion (including warrants) and no other change to the March 31, 2021 financials, the capital adequacy ratio of the company as of March 31 would increase from 18.7 percent to over 28 percent and gearing as of March 31 will decline from 6.7x to less than 5x.

On April 27, PNB Housing Finance had reported a consolidated net profit of Rs 127 crore for the quarter ended March 2021. The company had posted a net loss of Rs 242 crore in the same quarter a year ago. Its total income during Q4FY21 declined to Rs 1,834 crore from Rs 1,952 crore, YoY.

At 11:50 am, the shares of PNB Housing Finance were trading at Rs 525.65, up Rs 87.60, or 20 percent. There were pending buy orders of 12,53,102 shares, with no sellers available.

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