Last month, the company said it has decided not to go ahead with Rs 4,000 crore capital infusion The legal battle as led by Carlyle would not be in the best interest of the company and its stakeholders.
The deal was finalized on 31 May. Soon after, it got embroiled in a controversy regarding the valuation of shares being offered to investors. Subsequently, the matter reached the Securities Appellate Tribunal (SAT) after the intervention of the market regulator Self.
“If you look at it, nothing is wrong. We followed SEBI’s policy, LODR instructions, we tried everything. It was just a question of interpretation.
But it seemed like a lengthy process due to hurdles in legal sanction, Prasad said in an interview to PTI.
He said the SAT’s split ruling also proved that it was only a matter of interpretation as the company’s argument was upheld by a judge in the case, reiterating: “I don’t think we’ve done anything wrong”.
Prasad said one of the judges, the presiding officer, ruled in favor of the company. “But, we are very clear that we don’t want any protracted legal battles. We want to focus on our work and move forward.”
That said when you’re going to do it uses a significant amount of bandwidth and it would have been a bit of a long-secure legal battle.
“I’m not in that business, we’re in the lending business, the financing business. What’s the point of being distracted by these kinds of things. So, we decided okay they’re the regulators and we decided to go Forward with the pull-back (from the deal),” Prasad said.
SEBI was approached after the decision of bifurcation of SAT in August Supreme court. However, the top court rejected the Sebi appeal in late October as PNB Housing Finance said it would withdraw from the deal.
The company has filed an application in the Securities Appellate Tribunal to withdraw its appeal.
Prasad said the company is in dire need of desired capital and will explore all avenues to raise funds, be it through borrowings, Qualified Institutional Placement (QIP), rights issue or issues of preference.
“Whether we do it through lending or QIP, preferential issue, rights issue, any other things that we can, we keep everything open and we will look at it and at the right time, we will allow us to Will approach the board to raise the money,” Prasad said.
He added that the company will continue to explore opportunities.
“We stay connected with everyone. See how we can move forward in terms of raising capital. We need to raise capital despite solid capital adequacy ratio and gearing position.
“But, we would still like to raise capital so that we can grow even faster than we can grow,” he said.
Right now, all the stakeholders of the company are in support of the company. They know the capital is needed, they know the company has a great, bright future, Prasad said.
They have also observed that in the last nine quarters there has been a slow and steady movement on several fronts.
“So, we will do that because they are all subsidiaries and they understand that the company needs it. We will look at all options in terms of raising funds,” Prasad said.
state ownership
(PNB) is the promoter of the company which holds 32.6 per cent stake in the company.
When asked what is PNB’s opinion on pulling out of the deal, he said: “We explained to them that this is the reason and we would like to back out of the deal. Due to the lengthy legal nature, it is not taking us anywhere else. It is distracting the overall focus of the business.”
They all agreed that it was the right thing to do, Prasad said.
In the second quarter ended September 2021, the company posted a net profit of Rs 235 crore, down 25 per cent from a year ago, mainly due to declining interest income and higher provisioning for bad loans.