PNB Housing files appeal in SAT against SEBI order - Anil Singhvi DECODES, EXPLAINS the entire matter in simple terms

PNB Housing has said that it has filed an appeal before the Securities Appellate Tribunal (SAT) against the letter issued by Securities and Exchange Board of India (SEBI) on June 18.

"Please note that Company has filed an appeal before the Securities Appellate Tribunal against the letter issued by the Securities and Exchange Board of India on June 18, 2021," PNB Housing said in a statement to exchanges.

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Speaking on the topic, Anil Singhvi, Managing Editor at Zee Business and well-known Market Guru, said that SEBI has taken very prompt, timely, and correct action.

"You are selling a company and that too below the book value. This is an NBFC housing finance company and the biggest parameter for their valuation is the book value. If you are selling it at a discount of around 0.8 or 80 percent of the book value, then this means that the seller is very desperate. But if the seller is desperate then what is the fault of minority shareholders in this," Singhvi said.

PNB Housing ने SEBI के आदेश के खिलाफ SAT में दी अर्जी

प्रेफरेंशियल एलॉटमेंट पर SEBI ने लगाई थी रोक

अनिल सिंघवी- छोटे शेयरहोल्डर्स के हित में SEBI का सही समय पर लिया गया ये एक्शन सराहनीय है, ये एक बेंचमार्क तय करेगा#PNBHousing #SEBI @AnilSinghvi_ @SEBI_India pic.twitter.com/dzIjxRwopZ

— Zee Business (@ZeeBusiness) June 21, 2021

He asked why minority shareholders should get a price that is below the book value. Secondly, when you sell a controlling stake then you get a premium for it and the premium should be much more and the biggest indication you got for this is that as the deal was announced the stock of PNB Housing traded on the circuit to circuit, he said.

The Market Expert added that there can be two reasons. First is if a promoter like PNB moves and a promoter like Carlyle comes then it will excite the market but along with that, the other major reason is, it is being sold at a very low price, its value is a lot more. The market has given a mandate on it and the stock can be seen doubling, he said.

Anil Singhvi said that SEBI has taken a very fast and correct decision in this matter by stopping the shareholders' voting and getting the valuation of the company done by an independent valuer.

"PNB can appeal before SAT against SEBI that is a legal remedy but the step taken by SEBI for the interest of minority shareholders or small shareholders is good and will set a benchmark," Singhvi added.

He further said that once the accurate valuation will be known then it will be worth seeing how much premium controlling Carlyle gives for the stake.