PNB Housing Finance Secures Approval for ₹50 Billion NCD Issuance to Fuel Growth

PNB Housing Finance greenlights ₹500 Billion NCD Issuance

September 6, 2025 – Mumbai

PNB Housing Finance Limited announced today that its board of directors has authorized the issuance of Non-Convertible Debentures (NCDs) with a total value of up to ₹500 billion. The company intends to raise these funds through a private placement offering.

This strategic move aims to reinforce the company’s financial base and support its ongoing loan operations and expansion initiatives. The NCDs will be issued in one or more tranches, with the possibility of utilizing a Green shoe option, permitting additional allocations if demand exceeds initial expectations.

PNB Housing Finance operates as a deposit-taking housing finance company, registered with the National Housing Bank (NHB). The organization’s primary focus lies in providing retail housing loans, catering to the requirements of the organized, large-scale housing sector.Additionally, the firm offers financial products for property purchase, construction, mortgage loans, and loans against property.

Recent Financial Performance

This decision follows a strong financial performance in the third quarter of the fiscal year 2026. The company reported a net profit of ₹2.3 billion, representing a 3% year-over-year increase, though slightly lower than the previous quarter’s earnings.

Net Interest Income (NII) for the quarter reached ₹7.6 billion, marking a 17% increase year-over-year and a 4% increase compared to the preceding quarter. Net Interest Margin (NIM) experienced a slight decrease from 3.75% to 3.74%, but improved from 3.65% in the same period last year.

Following the announcement, PNB Housing Finance’s stock closed at ₹791.80 on the Bombay stock Exchange (BSE), reflecting a 1.21% gain.

Key Financial Highlights

Metric	Value	Year-over-Year Change	Quarter-over-Quarter Change
Net Profit	₹2.3 Billion	+3%	–
Net Interest Income (NII)	₹7.6 Billion	+17%	+4%
Net Interest Margin (NIM)	3.74%	+0.09%	–

Did You Know? Non-Convertible Debentures represent a popular method for companies to raise debt financing without offering equity.

The Indian housing finance market has experienced considerable growth in recent years, driven by increasing urbanization and a growing middle class. According to a report by Knight Frank, housing sales in India’s top cities rose by 36% year-on-year in the first half of 2024. Read more here.

Pro Tip: When evaluating a company’s debt issuance, carefully consider its debt-to-equity ratio and its ability to service the debt.

Understanding Non-Convertible Debentures (NCDs)

NCDs are a form of debt instrument that do not give the holder the option to convert them into equity shares of the company. They typically offer a fixed rate of interest and are considered a relatively secure investment compared to equity. Businesses utilize NCDs to secure funding for various purposes,including capital expenditure,debt repayment,and working capital requirements. The private placement route allows companies to issue NCDs to a select group of investors, often institutional investors, streamlining the process and reducing associated costs.

Frequently Asked Questions about PNB Housing Finance NCD Issuance

• What are NCDs? Non-Convertible Debentures are debt instruments that do not convert into equity.
• Why is PNB Housing Finance issuing NCDs? To strengthen its financial resources and support business growth.
• What is a Green Shoe option? It allows the company to issue more debentures if there is high investor demand.
• What is PNB Housing Finance’s primary business? Providing retail housing loans and related financial products.
• What was PNB Housing Finance’s net profit in the latest quarter? ₹2.3 billion.
• What is the meaning of NIM (Net Interest Margin)? It indicates a lender’s profitability relative to its interest expenses.

What are your thoughts on PNB Housing Finance’s strategy to raise capital through NCDs? Share your insights in the comments below!

How does this NCD issuance contribute to PNB Housing Finance’s long-term financial stability?

Understanding the ₹50 Billion NCD Issuance

PNB Housing Finance, a leading housing finance company in India, has received approval to issue Non-Convertible Debentures (ncds) totaling ₹50 billion (approximately $600 million USD). This meaningful fundraising initiative, announced on September 6, 2025, is strategically designed to bolster the company’s growth trajectory and expand its market presence within the competitive housing finance sector. the NCDs will be offered in multiple tranches, catering to diverse investor profiles.

What are NCDs and Why Issue them?

Non-Convertible Debentures are a type of debt instrument that doesn’t convert into equity shares.They represent a fixed income investment, offering investors a predetermined interest rate over a specific period. PNB housing Finance is leveraging this route for several key reasons:

Capital Infusion: The ₹50 billion raised will provide a substantial capital base for lending activities.

Diversification of Funding Sources: Reducing reliance on customary bank funding and diversifying the funding profile.This is crucial for financial stability and long-term sustainability.

Lower Cost of Borrowing (possibly): Depending on market conditions and investor demand, NCDs can sometimes offer a more competitive cost of borrowing compared to bank loans.

Long-Term Funding: NCDs typically have longer tenures, providing PNB Housing Finance with stable, long-term funding.

Allocation of Funds: Where Will the ₹50 Billion Go?

The company has outlined a clear plan for utilizing the funds raised through the NCD issuance. The primary focus areas include:

1. Home Loan Growth: A significant portion will be allocated to expanding the home loan portfolio, targeting both salaried and self-employed individuals. This includes financing for purchase of new homes, resale properties, and home construction.
2. Affordable Housing: PNB Housing Finance is committed to supporting the government’s “Housing for All” initiative. A dedicated portion of the funds will be channeled towards affordable housing loans, making homeownership accessible to a wider segment of the population.
3. Loan Against Property (LAP): Increasing the LAP portfolio, catering to businesses and individuals seeking funds against thier property assets. This segment is experiencing robust growth due to its flexibility and competitive interest rates.
4. Strengthening Capital Adequacy: maintaining a healthy capital adequacy ratio is paramount for regulatory compliance and future growth. A portion of the funds will be used to bolster the company’s capital base.
5. Technological Advancements: Investing in digital infrastructure and technology to enhance customer experience, streamline loan processing, and improve operational efficiency. This includes fintech integrations and AI-powered solutions.

Investor Details and Key Terms of the NCDs

While specific details vary with each tranche, here’s a general overview of the NCD offering:

Tenure: The NCDs will have varying tenures, ranging from 3 years to 10 years, providing investors with options aligned with their investment horizons.

Coupon Rate: The interest rates (coupon rates) will be resolute based on prevailing market conditions and the credit rating of PNB Housing Finance. Expect competitive rates compared to other fixed-income investments.

Security: The NCDs are secured by the company’s assets,providing investors with a degree of security.

Credit Rating: PNB Housing Finance typically maintains a strong credit rating from leading rating agencies, indicating its creditworthiness. (Investors should verify the latest rating before investing).

Listing: The NCDs will be listed on the stock exchanges (BSE and NSE), providing investors with liquidity.

Impact on the Housing Finance Market

this ₹50 billion NCD issuance is expected to have a positive ripple effect on the Indian housing finance market.

Increased Lending Capacity: PNB Housing Finance’s increased lending capacity will contribute to greater credit availability for homebuyers.

Competitive Landscape: The move could intensify competition among housing finance companies, potentially leading to more innovative products and competitive interest rates.

Growth in Real Estate Sector: Increased home loan availability will stimulate demand in the real estate sector, supporting property sales and construction activity.

Financial Inclusion: The focus on affordable housing will promote financial inclusion,enabling more individuals to achieve their dream of homeownership.

PNB Housing Finance: Recent Performance & Future Outlook

PNB Housing Finance has demonstrated consistent growth in recent years,driven by a strong focus on customer service,product innovation,and prudent risk management. The company reported a significant increase in its net profit for the fiscal year 2024,fueled by robust loan growth and improved asset quality.

Looking ahead, PNB Housing Finance is well-positioned to capitalize on the growing demand for housing finance in India. The ₹50 billion NCD issuance will provide the necessary fuel to accelerate its growth plans and solidify its position as a leading player in the industry. Analysts predict continued expansion in the mortgage market and a positive outlook for PNB Housing finance’s stock performance.

benefits of Investing in PNB housing Finance NCDs

Fixed Income: provides a predictable stream of income through regular interest payments.

Security: Secured by the company’s assets, offering a degree of protection.

Liquidity: