PNB Housing Finance looking to raise Rs12,000 crore through debt

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At its Annual General Meeting, on 26th July, PNB Housing Finance will seek the approval of shareholders for raising Rs12,000 crore through debt. This debt will be issued through non-convertible debentures. Debentures mean secured bonds. This means that the money raised through debentures is secured aginst specific assets. If the company defaults on payments due on debentures, then the secured assets are sold to pay the bond holders. Non-convertiblde debentures mean that these debentures cannot be converted into equity.

PNB Housing Finance will issue these debentures on a private placement basis. Private placement means that these debentures will not be issued through the public route. They will be sold privately to investors such as large financial institutions. These non-convertible debentures will be issued in one or more tranches. Tranch means the portion of the money that will be raised in one go through the issuance of debentures. The specific purpose for which the money raised through these debentures has not been explicitly stated by PNB Housing Finance. But it will probably be used by the company to give out more housing loans to its customers.

PNB Housing Finance’s stock is down by more than 1% today. It is trading at around Rs326.80 per share.