Block deal: PNB Housing Finance shares drop 2% amid heavy turnover; Carlyle Group likely seller

PNB Housing Finance Ltd shares declined over 2 per cent in Tuesday's trade amid a surge in turnover on BSE, following a media report that suggested Carlyle Group was looking to offload 12.8 per cent stake in the state-run housing finance company. As per CNBC-TV18, Carlyle Group had upped the block deal size to 12.8 per cent from 6.4 per cent, with offer size totalling Rs 2,511 crore against Rs 1,256 crore earlier.

A total of 3.43 crore PNB Housing Finance shares worth Rs 2,654.56 crore changed hands on BSE. The stock fell 2.41 per cent to hit a low of Rs 775, before recovering some ground. It was later trading at Rs 784, down 1.28 per cent. As per the report, the offer price was set at Rs 755, which was at a 5 per cent discount to Monday's closing price.

Post PNB Housing Finance's Q1 results, JM Financial said the asset quality for the HFC is now is at comfortable level and with recoveries expected to continue from the balance write-off pool, it will offer significant tailwinds in terms of credit costs.

"We believe that the shift towards high-yielding affordable and emerging markets and with established operating infrastructure, steady branch expansion would drive healthy retail growth and as the company also guided for corporate disbursements to start from 2H, we remain confident on its strong growth trajectory. In addition, govt’s PMAY infusion and changing product mix would also provide
room to expand NIMs," it said.

The brokerage expects PNB Housing stock to re-rate, given its continued delivery on RoA metrics, attractive valuations and relatively lower asset quality risks. It maintained 'BUY' on the stock with a revised target of Rs 1,200.