Private equity firm Blackstone has pulled out of the race to buy PNB Housing FinanceNSE -0.60 %, leaving the contest to Varde Capital, Genera Atlantic and Carlyle where each one is vying to have a share of the safest pie in the domestic financial market.
Blackstone’s decision comes soon after it bought Wadhawan Global Capital’s affordable housingNSE 1.73 % unit, Aadhar Housing Finance, which is well entrenched in the affordablehousing segment.
The buyout firm paid Rs 2,700 crore for the firm.
“Blackstone has pulled out of the race, leaving behind three bidders for the housing finance business,” said a source close to the development. “The sale process is likely to conclude by end of the financial year,” the source added. Amit Dixit, head of Blackstone India, confirmed pulling out of the race.
State-run Punjab National BankNSE 0.60 %, reeling under bad loans, has put its 33 per cent stake in the mortgage unit to improve its capital position.
In a market where housing shortage is enormous, mortgage business is among the most secure where individuals ensure they don’t default.
Blackstone, with investments in real estate, sees synergies in the housing finance space and has been eager to expand into retail segment by buying a housing-finance company.
General Atlantic may have an advantage in buying the stake since it already owns around 9 per cent in the housing finance company. Punjab National Bank is looking to raise Rs 5,300 crore in the stake sale.
PNB Housing finance reported a 32 per cent increase in net profit in the December on better margins and stable asset quality. The company has maintained asset-liability management position.
The lender’s short-term borrowing has reduced from 17.5 per cent in March 2018 to 11.7 per cent in Sept 2018. For long term, it has started raising funds from overseas markets and public deposits.
The PSU bank has disbursed loans worth Rs 9,300 crore in the third quarter and Rs 27,500 crores during the nine months period of the financial year 2018-19.