Commercial paper refers to short-term loans raised by companies, and are typically used to meet short-term requirements like taking care of inventory and accounts receivable requirements.
PNB Housing Finance, backed by Punjab National Bank, is the fifth largest housing finance company in India.
“We are thankful to various lenders for placing their funds in our Company. These borrowings in the present environment exhibits the trust and faith of the lender community in PNB Housing Finance Limited,” said MD Sanjaya Gupta.
The company also sought to assuage any concerns about the company’s liquidity position.
“During the month of September 2018, we did not raise any funds from capital market in view of the surplus liquidity we had,” said CFO Kapish Jain. ” As on date, the Company has cash and liquid investments of approx. INR 6,000 crores.”
Non-banking finance companies in India, which cater to segments such as gold loans, auto loans, consumer loans, infrastructure loans and home loans, have found it increasingly difficult to raise funds after one of them, IL&FS, started defaulting on its payments in September.
The incident led to banks refusing to give loans to non-banking finance companies.
“In spite of the current tight market scenario our Company has successfully raised funds through CPs aggregating to INR 1,775 crores at competitive rates,” Gupta added.
CFO Jain said the availability of credit demonstrated the company’s “strong fundamentals”.
“Moreover we are comfortable both on our liquidity and ALM position. Further to add, this fund raise shall not increase our overall exposure to CPs (commercial papers) and we would continue to maintain our overall borrowing through CPs at around 12-13% compared to 19% as of 31st March, 2018,” he added.
PNB Housing Finance, authorized to take deposits, got listed on the Indian stock exchanges on 7th November, 2016.
The Company offers both housing and non-housing loans to retail customers, and gives construction finance loans to real estate developers.