PNB is expecting a writeback of Rs 4,000 crore from Essar Steel and Bhushan Power and Steel, which are undergoing resolution under the Insolvency and Bankruptcy Code. (Photographer: Dhiraj Singh/Bloomberg)

Punjab National Bank Aims to Raise Rs 10,000 Crore In FY20

State-owned Punjab National Bank is looking to raise Rs 10,000 crore in FY20 from non-core asset sales, rights issue and expected writebacks from two large accounts undergoing insolvency proceedings.

PNB is expecting a writeback of Rs 4,000 crore from Essar Steel Ltd. and Bhushan Power and Steel Ltd. which are undergoing resolution under the Insolvency and Bankruptcy Code.

“For FY20, we are looking to raise Rs 10,000 crore. We are expecting Rs 1,000 crore from sale of non-core assets, Rs 4,000 crore writeback (from) two accounts and Rs 5,000 crore from markets,” PNB chief executive Sunil Mehta told reporters.

The bank expects to raise Rs 600 crore from sale of its erstwhile headquarters, situated at Bhikaji Cama Place in South Delhi, to the income tax department. The deal is in the final stages. It is also planning to raise Rs 400 crore by selling some real estate properties.

According to Mehta, PNB would raise Rs 5,000 crore through a rights issue or qualified institutional placement.

The state-run lender has set a recovery target of Rs 20,000 crore in 2019-20. In 2018-19, its recovery more than doubled to Rs 20,000 crore from Rs 9,666 crore in 2017-18.

The bank narrowed its loss by nearly 65 percent to Rs 4,750 crore during the fourth quarter of fiscal ended March 31, 2019. Its net loss was at Rs 13,417 crore in the same quarter of FY18.

Gross non-performing assets, as a percentage of the loan book, improved to 15.50 percent from 18.38 percent at the end of March 2018. Net NPAs also came down to 6.56 percent as against 11.24 percent in the year-ago period.

On Wednesday, PNB shares fell 4.99 percent to Rs 81.90 apiece on the BSE while the benchmark Sensex shed 0.62 percent to end the day at 39,502.05 points.