May , 2023
PNB Housing Finance Ltd.
19:49 pm

Nandini Dasgupta

Company Profile

The National Housing Bank (NHB) has PNB Housing Finance Limited in its list of registered housing finance companies. It started operating in the year 1988, after being incorporated under the Companies Act of 1956 and is being promoted by Punjab National Bank. PNB Housing Finance Ltd, having over three decades of specific knowledge in home finance, has a strong network of branches scattered across the Nation that enables its clients to easily access financial services. The company offers home loans to individuals and businesses for the purpose of purchasing, building, repairing and up gradation of property.

Housing Finance Industry in India

  •  One of the industries with the highest international recognition is real estate. Housing, retail, hospitality and commercial properties are its four subsectors. The expansion of the business environment and the demand for office space, as well as for housing in urban and semi-urban areas, are excellent complements to the growth of this sector. Additionally, greater Non-Resident Indian (NRI) investment is anticipated in this industry over the long and short terms.
  • Tax deductions for housing loan interest of up to Rs.1.5 lakh and a tax holiday for projects that build affordable housing was being extended through the end of the fiscal year 2021–2022, respectively, under the Union Budget 2021–22. From Rs.12,000 crore (approx) in 2019 to Rs.65,000 crore (approx) in 2040, the real estate market will increase considerably. In India, the real estate market is anticipated to grow by 13% (approx) of GDP by 2025. To make up for the shortfall in priority sector lending from banks and other financial institutions, the government established the Affordable Housing Fund (AHF) under the National Housing Bank (NHB) with an initial corpus of Rs.10,000 crore (approx).
  •  Real Estate Investment Trust (REIT) platforms, will allow all types of investors to invest in the Indian real estate market, has been approved by the Securities and Exchange Board of India (SEBI). In the ensuing years, it would produce a market opportunity in India worth Rs.1.25 trillion (approx).
  • Despite the stress brought on by the Coronavirus epidemic having an impact on India’s major residential markets, the average rate of new projects is still at its prior level. Covid19 caused many to re-evaluate their plans for investing in and purchasing homes. The idea is to invest in a home, either to live in or to use as an asset that could produce an additional source of income, primarily for use at a time of crisis.
  • The mortgage finance market in India is anticipated to expand at a CAGR of 21% (approx) from FY22-27. The demand for homes in this market is expected to increase because of favourable factors like rising income levels, increased affordability and financial support from lenders and government. India’s real estate market is booming. And today’s developers are more financially stable and organised.


Company Perspective and Review

  • The stock gave a 3 year return of 114% (approx) as compared to Nifty Midcap 100 which gave a return of 146% (approx as of last trading session).
  • The company has generated regular revenues and profits over the years. Dividend was declared in the year 2019. The company is having a comfortable Price Earnings and Return on Equity ratios. The scrip shows a 20 day EMA of  Rs.457. R1 is between Rs.443 - Rs.452 and S1 is between Rs.434 – Rs. 425. PNB Housing Finance has recently declared Rights Issue with a premium price of Rs. 265.
  •  PNB Housing Finance is majority public owned. The technical indicators of the company indicates a  buy.




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