PNB Housing Finance plunges 7% as Quality Investment Holdings offloads 9.5% stake in Rs 2,300 cr block deal

Shares of PNB Housing Finance plunged 7 per cent on November 13, 2024, following a large block deal that saw 2.5 crore shares, or 9.5 per cent of its equity, changing hands. The deal, valued at Rs 2,300 crore, led to a sharp drop in stock price, which hit Rs 908.15 in early trade. This drop was further exacerbated by the high trading volumes triggered by the block deal, with over three crore shares being exchanged, significantly higher than the usual daily average of around 16 lakh shares.

The block deal has also raised concerns regarding the potential for further offloading of shares in the future. One of the key investors involved holds nearly 20 per cent of the company and is currently restricted by a 60-day lock-in period before they can sell any more shares. This restriction adds to the market's cautious stance on the stock in the short term.

PNB Housing's Q2 performance shows growth

Despite the drop in stock prices, PNB Housing Finance has posted a solid 23 per cent year-on-year growth in its net profit for Q2 FY25. The company reported a net profit of Rs 470 crore, bolstered by a significant improvement in its asset quality. The gross non-performing assets (GNPA) ratio dropped to 1.24 per cent, a notable decline from 1.78 per cent in the same period last year. The GNPA ratio also showed an improvement from 1.35 per cent in the previous quarter, reflecting better asset management and credit quality.

However, while the company’s net interest income (NII) grew marginally by 1.2 per cent to Rs 669 crore, it still fell below expectations. Despite this, the net interest margin (NIM) saw a slight uptick to 3.68 per cent from the previous quarter's 3.65 per cent. However, the NIM remains lower compared to last year's 3.95 per cent, indicating that the company is still facing pressure on its lending margins. Investors will be watching for further guidance from PNB Housing on how it plans to navigate these challenges moving forward.