PNB Housing Finance IPO – complete review


PNB Housing Finance Ltd is the fifth largest housing finance company promoted by Punjab National Bank (PNB). The company is engaged in housing loan finance business having 51:49 investments from PNB and Carlyle Group. The Company conducts operations through an operating model which included 47 branches across the northern, western and southern regions of India and 16 processing hubs. Its distribution network included over 7,110 channel partners across different locations in India.

PNB Housing Finance will open its public share sale on October 25 aiming to raise Rs 3,000 crore in what will be the second largest issue in 2016. The company has set a price band at Rs 750-775 per share valuing it at close to Rs 13,000 crore.

IPO Details

Subscription Dates
25th – 27th October 2016
Price Band
Rs. 750- 775/-
Total IPO Size
Rs. 3000 crore only
Minimum bid (lot size)
19 shares
Face value of shares
Rs. 10


PNB Housing Finance Financial performance



From 2012 to 2016 PNB housing finance has witnessed a CAGR of whopping 61% , its loan portfolio grew from just under Rs 4000 crore to above Rs. 27000 crore, which is a phenomenal performance. Its revenue jumped from Rs 461 crore to Rs. 2700 crores (approx.). Profit rose from Rs 77 crore to Rs 327 crore.

Should you Invest or give it a miss?

Demand for houses and housing loans is rapidly increasing with time. Present Government is also pushing in the direction of House for all, these things give a very bright scenario for Housing finance companies.
In the year 2016, PNB housing has posted earnings of Rs. 27.58 per share. Based on this, at the upper price band IPO is priced at the PE of 28.1. This value is much higher than the other competitors namely LIC Housing finance, Indiabulls Housing Finance, Dewan Housing Finance, etc.  These players are trading in range of 13 to 18 PE.
So, looking at the valuations IPO seems to be highly priced. I would suggest to put money only if you are the kind of Investor with motto “Invest and forget for decades”.

NOTE: All the analysis done here is a personal view. This should not be used as only reason to invest or not. Please consult your investment adviser before making any investment.


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