PNB Housing Finance readies Rs 2,500-crore IPO, heads to tier 2, 3 cities

New Delhi: PNB Housing Finance, which has set the ball rolling for a Rs 2,500-crore IPO, is looking to take its growth to the next level with a pan-India expansion to meet surging demand from tier-II and tier-III cities, a top company executive said.

"We want to build our footprint pan-India. At present, we have 48 branches at 28 locations. There are at least 60 more locations that have a population of more than 8-9 million. So, that is our aim to go with," Sanjaya Gupta, MD, PNB Housing Finance, told PTI in an interview.

On IPO, Gupta said it is likely to hit the market by October or later and there is a "desperate need" for growth capital.

"We have already filed the draft red herring prospectus (DRHP). We are expecting the first-level queries by third week of July or first week of August. We will be quick to respond to the queries of Sebi. My guess is that by the end of August, we should have the IPO card and start roadshows in September-October," he said.

"We need the capital very desperately. So, it is of very significant importance that we quickly get the capital infusion (through IPO). Mainly in the BFSI (banking, finance, services and insurance) domain, this is a way to monetise the valuation."

The proceeds from the IPO will be used for growth of the company. "We need to augment growth and distribution. It is growth capital that we are looking for," he said.

Over the years, the company has moved from its North India centric approach to being "well-balanced".

"Historically, we were north-centric. We are very well balanced today. Incrementally, we do 40 percent (business) from north, 30 percent each from west and south. At portfolio level, we are 45 percent north-central, but equally divided between west and south with 32 percent each," he said.

In 2010 when this entire re-engineering process started, 77 percent of the book was sourced from north. Today, it stands at 45 percent.

On demand scenario, the company is optimistic about the mass market, but feels that the luxury market needs to step up.

PNB Housing Finance also has plans to open an overseas branch, preferably in the Middle East, to tap the potential of the NRI segment.

The total market size of the NRI segment constitutes about 12-13 percent of the overall housing market.

"We will focus on the NRI market. We will work on that. Maybe in the Middle-East, the economies are stable, when we look at opening branches there," Gupta added.