PNB Housing Finance shares hit upper circuit six days in a row, but the potential upside could be limited now
PNB Housing Finance
- PNB Housing Finance’s share price has skyrocketed over the last 10 trading days.
- Every ₹10,000 invested in the stock on May 25 is now worth ₹22,000 as on June 7, 2021.
- However, the potential upside could be limited from the current share price.
The incessant rally in PNB Housing Finance’s shares was triggered by the news of former
AdvertisementOver the last 10 trading sessions, the non-banking lender’s share price has surged by over 118%. The company’s shares have been locked in the upper circuit for the last six consecutive days.
But the upside could be limited, according to Kranthi Bathini, director of equity strategy at WealthMills Securities.
“There has been a sharp run-up in the share price of PNB Housing Finance over the last few trading sessions. This could mean the potential upside now is limited,” Bathini told Business Insider.
“The recent investment news has turned it into a momentum stock. The rally in share prices of such stocks is driven by news, and not necessarily the technicals and fundamentals,” he further added, linking the sharp rally in PNB Housing Finance’s share price to the ₹4,000 crore fundraising news.
According to the company’s exchange filing, private equity giant The Carlyle Group will contribute to 80% of the ₹4,000 crore capital raise. The other prominent name in the fundraise is Aditya Puri’s Salisbury Investments.
Puri is the former CEO and MD of HDFC Bank, India’s largest private sector bank, which also owns the country’s largest private mortgage lender HDFC.
AdvertisementThe company noted in its exchange filing that the primary objective of the fundraise is to augment capital adequacy, reduce the ratio of debt to equity and fund its growth objectives in the retail lending segment.
Former HDFC Bank CEO Aditya Puri and Carlyle will be among the new owners of PNB Housing Finance triggering an open offer
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