India’s GNP Housing plunges 5% after canceling fundraising deal with Carlyle


A gardener waters a lawn in front of an advertisement for PNB Housing Finance Ltd.’s Initial Public Offering (IPO). in India in Mumbai, India on October 25, 2016. Photo taken on October 25, 2016. REUTERS / Shailesh Andrade

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BENGALURU, Oct. 18 (Reuters) – Shares of Indian firm PNB Housing Finance Ltd (PNBH.NS) fell 5% on Monday to their lowest level since early June after the mortgage lender canceled a fundraising deal with a group of investors, led by – the investment company Carlyle Group (CG.O).

PNB Housing Finance announced Thursday evening that it has ended the deal, which was announced in May to issue shares worth 40 billion rupees ($ 533.2 million) to investors led by Carlyle, after a months-long legal battle with India’s market regulator, the Securities and Exchange Board of India (SEBI).

The deal was challenged by SEBI following a statement from an institutional investment advisory firm that the deal was unfair to minority shareholders. The regulator had asked the company to block it until it undertakes an independent assessment. Read more

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PNB Housing Finance challenged SEBI’s order by going to the Securities Appeal Tribunal of India (SAT). In August, the SAT delivered a split verdict, banning the company from disclosing the results of shareholder votes on the deal. Read more

“There is still no visibility or certainty as to the timing of judicial determination of legal issues,” PNB Housing Finance said Thursday.

ICICI Securities said in a memo that concerns about the quality and growth of assets reappeared with the cancellation of the transaction.

PNB Housing Finance’s stock had more than doubled to a high of Rs 925 in two years after the deal was announced in May. He has since forfeited some of those gains and last traded at Rs 606.75.

($ 1 = 75,0210 Indian rupees)

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Reporting by Nallur Sethuraman in Bangalore; Editing by Anil D’Silva

Our Standards: The Thomson Reuters Trust Principles.

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