Indian state-owned lender Punjab National Bank (PNB) has reportedly decided to sell a 22% stake in its housing finance arm to General Atlantic Partners (GA) and Varde Partners for INR35bn ($495.5m).
According to a report published in The Economics Times, GA and Varde Partners have emerged as the forerunners to acquire the stake on sale.
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In December last year, PNB revived the plans to divest the housing finance arm after the initial scheme to sell 66% combined stake hold by the company and private equity investor Carlyle did not materialise.
Currently, PNB owns 32.79% in PNB Housing. The bank has decided to retain a 10.7% stake in the unit and divest the remaining stake to two buyers.
GA, which holds 9.91% stake in the mortgage unit, is expected to acquire an additional 12% interest in the latest divestment. Varde Partners will acquire the remaining 10% stake. Both the companies have already submitted binding bids.
A formal announcement regarding the divestment is expected to be made later this week, sources familiar with the development told the publication.
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By GlobalDataEstablished in 1988, PNB’s housing arm is one of the leading housing finance companies in India. As on 31 March 2018, the housing finance unit had assets worth INR622.52bn.
Its net non-performing loans stood at 0.25%. The company has 84 branches across the country.
PNB, one of the largest state-owned lenders in the country, suffered a $1.77bn fraud last year.
