PNB Housing Finance Board Recommends Issue Of NCDs Worth Rs 10,000 Crore

PNB Housing Finance Ltd.'s board of directors recommended on Wednesday an issuance of non-convertible debentures worth up to Rs 10,000 crore.

At a meeting, the board recommended the NCDs on a private placement basis in one or more tranches. This is subject to shareholders' approval at the firm's 37th annual general meeting on Aug. 21, according to an exchange filing.

The firm also announced the record date of Aug. 1 for its dividend worth Rs 5 apiece, which is also subject to approval at the AGM, where the members will also mull over approving Vinod Kothari & Co. as the secretarial auditor of the company for five years.

An NCD is a fixed-income instrument that provides structured returns to investors. As NCDs are unsecured and not backed by assets, the market participants evaluate the issuing company's creditworthy and debt-servicing capacity before allotment.

This NCD issuance proposal comes after a positive outlook from global financial services firm UBS, which initiated coverage on PNB Housing Finance with a 'buy' rating. It set a price target of Rs 1,300 for the company.

Shares of PNB Housing Finance closed 1.76% lower at Rs 1,084.60 apiece on the NSE, compared to a 0.35% fall in the benchmark Nifty. The stock has risen 36.19% in the last 12 months and 23.57% on a year-to-date basis.

Thirteen analysts tracking the company have a 'buy' rating on the stock. The average of 12-month analysts' price target implies a potential upside of 12.8%.