Some shareholders are likely to raise questions at the PNBHF meeting in the future about the company’s possible loss of majority shareholder status at PNB. And into the circumstances behind a consortium of investors spearheaded by US private equity giant The Carlyle Group and former HDFC Bank Ltd chief executive Aditya Puri’s Rs 4000-crore investment in PNBHF announced last week.
Carlyle will become PNB Housing’s largest shareholder as a result of the capital investment. Despite the fact that both the government and PNBHF officially said that PNB would retain a 26 percent share, this is what happened.
PNBHF shares have doubled in value in the last six days, despite a report from Stakeholders’ Empowerment Services, a leading “proxy advisory firm” dedicated to protecting minority shareholder interests, describing the PNBHF board resolution on preferential issue of equity shares and warrants to the consortium as a “unfair transaction, against public shareholders and PNB.”
PNB Housing Finance’s preference share allocation to Pluto Investments, a Carlyle affiliate (which will subscribe to 80 percent of the shares issued), and Puri’s Salisbury Investments, as well as two other existing foreign investors, will leave PNB with only a 20.3 percent stake in the housing finance giant. This implies it will lose not only its majority shareholder status, but also its veto power on the company’s board of directors. The Carlyle Group’s stake will increase to more than 50%.