PNB Housing Finance Share Price: PNB Housing reports sharp drop in target, “sell” rating, as a contract with Carlisle was canceled

New Delhi: The NBFC is seeing a significant difference after the board decided not to pursue a proposed preference issue of Rs 4,000 million per share to Carlyle Group, General Atlantic, SSG Group and other investors.

Some brokers have lowered their ratings to ‘sell’ and lowered price targets significantly due to lack of growth capital, weak balance sheets and uncertainty about high NPAs.

The stock has seen a rebound and nearly doubled since the capital infusion was announced in May. But now that the deal has been canceled, ICICI Securities says at the moment the stock is likely to decline 0.75x from 1 in the FY23 book, as growth momentum has stalled.

The brokerage said the priority issue was an important trigger for the stock revaluation as it would strengthen PNB Perumahan’s balance sheet and support growth.

“We have reduced our earnings estimates by more than 10 per cent for FY22 and more than 20 per cent for FY23. Given this unfavorable growth, we revised our target price from Rs 848 to Rs 485. We downgraded the stock from ‘buy’ to ‘buy’. sell ‘, “said ICICI Securities. ICICI’s latest target is 42 percent lower than the previous target.

PNB Housing Finance Share Price: PNB Housing reports sharp drop in target, “sell” rating, as a contract with Carlisle was canceled

Another brokerage firm, Nirmal Bang Institutional Equities said NBFC had struggled to raise capital for more than two years, which had impacted new business generation and AUM’s growth, especially at a time when profits were declining due to preparation. I have come.

“At the moment, the company is back from before the capital increase announcement, which means uncertainty has returned. With the stock more than doubling (120 percent at its peak) since the deal was announced. The transaction is closed, we expect a sharp decline in value for the stock,” he said.

PNB Perumahan, Nirmal Bang said, concerns about lack of growth capital, weak balance sheet and underperforming assets need to be addressed.

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