Shares to Buy: PNB Housing Finance shares were trading as high as 4 per cent on NSE after global brokerage house Morning Stanley initiated coverage on the housing finance scrip. Morgan Stanley maintained an ‘overweight’ stance on PNB Housing Finance with a target price of Rs 700 per share. That is, investors can get a strong return of about 36 per cent. The brokerage estimates that the base case profit after tax of the company would rise by 8-9 per cent for FY24-25, amid expected lower funding costs.
Morgan Stanley said it looks at the prospective impact of the rights issue on its base case.
The board of PNB Housing Finance has approved a rights issue of around 9.06 crore shares at a price of Rs 275 per share to raise up to Rs 2,500 crore. The board approved the right entitlement ratio of 29:54 under which 29 equity shares will be offered for every 54 units held by an eligible equity shareholder on the record date.
The record date has been fixed as April 5. The issue will open on April 13 and close on April 27.
The brokerage firm expects lower funding costs, partially offset by royalty costs.
Stock Price History
According to exchange data, the stock has gained nearly 9 per cent in 5 days. The stock has also lost about 10 per cent in the last 1 month. However, the stock returned more than 35 per cent in a period of 6 months. The stock has given a positive return of 29.5 per cent to the investors during the one-year period.
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