PNB Housing has a smashing debut

PNB Housing has made a smashing debut on the bourses. As against the IPO price of Rs.775, the stock got listed on the BSE almost Rs100 higher at Rs.863, up over 11% the IPO price.

The IPO was subscribed 30 times. Qualified Institutional Buyers (QIBs) subscribed their portion over 37 times and retail were the worst at a mere 1.35 times. HNIs were the biggest subscribers at 86 times.

51% subsidiary of Punjab National Bank, PNB Housing Finance is India’s 5th largest home loan provider (after HDFC, LIC Housing, Dewan and Indiabulls Housing) with loan book of Rs. 30,900 crore (30-6-16), 70% of which is housing loans, having average ticket size of Rs. 32 lakh. Average ticket size for non-housing loans, which constitute 30% of the loan book, is Rs 57 lakh. With operations mostly in the urban areas of North, South and West India, its loan book has posted CAGR of 62% between March 2012 to June 2016.

In our New Issue Analysis, we had said, “Housing finance industry has been on a growth trajectory, with further headroom for growth. Company’s industry-leading growth coupled with sound fundamental position make it an attractive investment opportunity, albeit softening due to higher base.  Positive sector outlook coupled with stunning growth rates make the issue a subscribe.”