Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

PNB Housing Finance Ltd / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pnb-housing-finance-ltd" target="_blank" data-smartkarma-citation="entities:23613:1" rel="noopener">PNB Housing Finance Ltd (PNBHOUSI IN)</a> (PHBHF) aims to raise up to US$300m via a rights issue in order to boost its capital base.</li>
<li>PNBHF is the housing finance arm of Punjab National Bank and is partly owned by Carlyle, with investments from General Atlantic as well.</li>
<li>In this note, we will talk about the rights issue and other deal dynamics.</li>
</ul>



PNB Housing Finance Ltd (PNBHOUSI IN) (PHBHF) aims to raise up to US$300m via a rights issue in order to boost its capital base.
PNBHF is the housing finance arm of Punjab National Bank and is partly owned by Carlyle, with investments from General Atlantic as well.
In this note, we will talk about the rights issue and other deal dynamics.


PNB Housing Finance Rights Issue - Finally Closing in on the Capital Raising

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

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Equity Bottom-Up

<ul>
<li>LICHF reported Q3FY23 earnings that was lower than expected due to the increase in provisioning. LICHF reported annualized credit cost of 1.2% vs expected run-rate of &lt;0.5%.</li>
<li>The higher provisioning was done purely from a management overlay perspective for extra caution. It led the PCR to rise to 51% vs 43%+ earlier. </li>
<li>The higher provisioning was not due to asset quality deterioration. In fact, asset quality improved slightly with GNPA at 4.75% vs 4.90% QoQ.</li>
</ul>


LICHF reported Q3FY23 earnings that was lower than expected due to the increase in provisioning. LICHF reported annualized credit cost of 1.2% vs expected run-rate of &lt;0.5%.
The higher provisioning was done purely from a management overlay perspective for extra caution. It led the PCR to rise to 51% vs 43%+ earlier. 
The higher provisioning was not due to asset quality deterioration. In fact, asset quality improved slightly with GNPA at 4.75% vs 4.90% QoQ.


LICHF: One-Off Discretionary Provisioning Impacted Q3FY23, But Q4FY23 Is On Track to Be Strong

<ul>
<li>While <a href="https://www.smartkarma.com/entities/lic-housing-finance-ltd" target="_blank" data-smartkarma-citation="entities:15667:1" rel="noopener">LIC Housing Finance (LICHF IN)</a> posted substantial decline in NIM to 1.80% vs 2.54% QoQ, this was largely due to one-off impact from a couple of items.</li>
<li>LICHF has maintained its prior guidance of beating FY22 NIM of 2.29%, which means that for full-year FY23, LICHF is still on track for a NIM of 2.3% or above.</li>
<li>There was a one-off provisioning relating to INR 180cr of write-offs, which was fully provided for, but due to Ind-AS accounting had to be booked again resulting in excess provisioning.</li>
</ul>


While LIC Housing Finance (LICHF IN) posted substantial decline in NIM to 1.80% vs 2.54% QoQ, this was largely due to one-off impact from a couple of items.
LICHF has maintained its prior guidance of beating FY22 NIM of 2.29%, which means that for full-year FY23, LICHF is still on track for a NIM of 2.3% or above.
There was a one-off provisioning relating to INR 180cr of write-offs, which was fully provided for, but due to Ind-AS accounting had to be booked again resulting in excess provisioning.


LICHF: FY23 NIM Guidance Intact Despite One-Off Impact in Q2FY23

<ul>
<li>With Q1FY23 PAT at INR 925cr+, LICHF is on track to beat our prior estimate of INR 3600cr+ for FY23 PAT.</li>
<li>We now project that LICHF can do INR 3850cr+ PAT in FY23, implying that at the current market cap of INR 21,000cr, LICHF is trading cheap at &lt;5.5x FY23 P/E.</li>
<li>Credit cost for the quarter was slightly higher at annualized 0.5% of AUM, however, excluding slippages from the OTR book, it was in line with long-term average of around 0.2-0.3%.</li>
</ul>


With Q1FY23 PAT at INR 925cr+, LICHF is on track to beat our prior estimate of INR 3600cr+ for FY23 PAT.
We now project that LICHF can do INR 3850cr+ PAT in FY23, implying that at the current market cap of INR 21,000cr, LICHF is trading cheap at &lt;5.5x FY23 P/E.
Credit cost for the quarter was slightly higher at annualized 0.5% of AUM, however, excluding slippages from the OTR book, it was in line with long-term average of around 0.2-0.3%.


LICHF: Earnings On Track To Beat Our Prior Projections

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lic-housing-finance-ltd" target="_blank" data-smartkarma-citation="entities:15667:1" rel="noopener">LIC Housing Finance (LICHF IN)</a> reported stellar results, in line with the expectation from our last note. NIM expanded while provisions declined leading to Q4FY22 PAT of INR 1100cr+.</li>
<li>Asset quality improved with Stage 3 assets at 4.64% vs 5.04% QoQ and Stage 2 assets at 3.08% vs 3.75% QoQ. LICHF also recovered 350cr of NPAs during Q4FY22.</li>
<li>Adjusted for one-off tax benefits and assuming FY23 NIM at 2.4%, LICHF's normalized PAT potential is INR 3600cr+ suggesting that LICHF is trading at &lt;6x P/E on FY23E PAT.</li>
</ul>



LIC Housing Finance (LICHF IN) reported stellar results, in line with the expectation from our last note. NIM expanded while provisions declined leading to Q4FY22 PAT of INR 1100cr+.
Asset quality improved with Stage 3 assets at 4.64% vs 5.04% QoQ and Stage 2 assets at 3.08% vs 3.75% QoQ. LICHF also recovered 350cr of NPAs during Q4FY22.
Adjusted for one-off tax benefits and assuming FY23 NIM at 2.4%, LICHF's normalized PAT potential is INR 3600cr+ suggesting that LICHF is trading at &lt;6x P/E on FY23E PAT.


India

LIC Housing Finance Limited provides housing finance services to individuals for purchase, construction, repair and renovation of new or existing flats and houses. The Company also provides finance on existing property for business, personal needs and gives loans to professionals for purchase, construction of clinics, nursing homes, diagnostic centers, and office space throughout India.

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LIC Housing Finance (LICHF IN)

PNB Housing Finance Rights Issue - Finally Closing in on the Capital Raising

PNB Housing Finance Ltd (PNBHOUSI IN) (PHBHF) aims to raise up to US$300m via a rights issue in order to boost its capital base.

Sumeet Singh

LICHF: One-Off Discretionary Provisioning Impacted Q3FY23, But Q4FY23 Is On Track to Be Strong

LICHF reported lower than expected Q3FY23 earnings due to one-off excess provisioning. Despite this, it provides an attractive valuation of <8x P/E...

Ankit Agrawal, CFA

LICHF: FY23 NIM Guidance Intact Despite One-Off Impact in Q2FY23

Despite a poor show in Q2FY23, we project that LICHF is on track to post INR 3200cr+ of PAT in FY23, which implies that LICHF is available at an...

Ankit Agrawal, CFA

LICHF: Earnings On Track To Beat Our Prior Projections

Q1FY23 PAT of INR 925cr+ suggests that LICHF is on track to beat our prior estimate of INR 3600cr+ FY23 PAT. We now estimate it to do 3850cr+ PAT,...

Ankit Agrawal, CFA

LICHF: Stellar Q4FY22 Results

LICHF reported stellar Q4FY22 earnings in line with our expectation. FY23 PAT is likely to be INR 3600cr+, suggesting that LICHF is available at an...

Ankit Agrawal, CFA

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