PNB Housing is going to raise Rs 4,000 crore from Carlyle Group, others.

PNB Housing Finance’s board of directors has approved an Rs 4,000 crore capital raise plan by the preferential issue of equity shares and warrants, according to a press statement.

Pluto Investments, a Carlyle Asia Partners IV, L.P. and Carlyle Asia Partners V, L.P. affiliate, has decided to invest up to Rs 3,185 crore at preferential equity and warrant allocation price of Rs 390 per share.

The company’s existing shareholders, Ares SSG’s and General Atlantic-managed funds, are also involved in the raise of capital.

Hardayal Prasad, Managing Director and CEO of PNB Housing Finance, said, “The current Fundraise and planned strengthening of the board and the management team will enable us to accelerate our strategic priorities, including further expand our footprint, promote the digitalization of the company, improve our operating model and customer commitment.”

The deal contemplated will trigger an obligatory Pluto Investments open offer for the acquisition from public action holders of up to 26% shareholdings of PNB Housing.

Salisbury Investments, Aditya Puri’s family investment business and former CEO and MD of HDFC Bank, is also participating in the capital issue. Puri is anticipated to be appointed as a Carlyle nominee director to the PNB Housing Finance board in the near future.

The primary goal of capital raising is to increase capital adequacy, decrease gearing, and accelerate retail expansion. The company’s capital adequacy ratio would rise from 18.7% to more than 28% by March 31, 2021, while gearing would fall from 6.7x to less than 5x.