State-run Punjab National Bank is looking to sell an around 7% stake in mortgage lender PNB Housing Finance, two officials aware of the deliberations told ET.
The New Delhi-based bank has already received interest from some players, including private equity investors, they said.
At current price, a 7% stake in the newly listed company will fetch nearly Rs 1,200 crore.
“The bank is open to selling its stake in the firm. We have not decided on the amount or time of the stake sale,” managing director Usha Ananthasubramanian said. She didn’t provide further details.
The bank currently holds a 39% stake in PNB Housing Finance.
Private equity firm General Atlantic Singapore Fund Fii Pte owns a 6.90% stake in the mortgage firm, while the Government of Singapore holds another 1.07%.
“We have had some early discussions. There is a lot of interest as PNB Housing has a great portfolio, low non-performing assets and has done considerably well after it got listed,” said one of the officials, adding that the bank will look to maximise its returns from the proposed sale.
PNB looks to sell 7% stake in PNB Housing Finance
The mortgage firm that listed on exchanges in November posted a net profit of Rs 137.8 crore for the quarter through December, an increase of 53% from a year earlier.
At the end of the December quarter, its gross NPA totalled 0.37% of loan assets, compared with 0.35% a year earlier. The company’s total income rose 41% to Rs 998.7 crore.
The company’s scrip on Monday closed 0.2% lower at Rs 1,001.45 on the Bombay Stock Exchange.
Another official said the stake sale may happen as early as the second quarter of the next fiscal year, which starts in April.
“We are not in a hurry. The bank does not require immediate funds,” he said.
The government has asked banks to sell their non-core assets to raise capital, even as they continue to be plagued by bad loans.
Last month, IDBI Bank informed stock exchanges that its board in principle approved a proposal to divest some of its noncore investments. The bank is expected to raise around Rs 5,000 crore through the deal.
“We are also looking at monetising our real estate assets,” said PNB’s Ananthasubramanian.
But Punjab National Bank isn’t looking to sell its stake in an insurance joint venture with Metlife, she said. “We would like to see that it (PNB Metlife Insurance) gets listed.”