INTRODUCTION

PNB Housing Finance Limited (PNBHFL) is an Indian public limited

housing finance company (HFC), headquartered in New Delhi with
branches in major cities across India. The company is promoted
by Punjab National Bank and is registered with state owned bank and
regulation authority of India - National Housing Bank (NHB).The
company provides housing loans & loan against property as a part of its
product portfolio and also holds the license to accept public deposits.
Company fixed deposit program has been rated “FAAA” by CRISIL and
“AAA” by CARE. The rating of “FAAA”and “AAA” indicates “High
Safety” with regards to the repayment of interest and principal.
Commercial Paper is rated at “A1(+)” by CARE & CRISIL and Non-
Convertible Debenture (NCD) are rated at “AAA” by CARE, “AAA” by
India Ratings, “AA+” by CRISIL and “AA+” by ICRA. Bank Loans
Long Term Rating is rated at “AAA” by CARE and ‘’AA+’’ by
CRISIL.
On 30 March 2019, Punjab National Bank announced that it had signed
an agreement to sell a 13.01% stake in PNB Housing Finance to private
equity firm General Atlantic and alternative investment firm Varde
Partners for ₹1,851.60 crore (US$260 million).
As on 31st december 2018, the shareholding pattern in PNB HFL,
Highest shareholding is 32.7 percent of PNB BANK
(PROMOTER/Parent) & 32.3 Percent of Quality investment holding
(QIH) & remaining part of FII, public, mutual fund companies,
corporate bodies & others.
Porter Five Forces:

Rivalry among existing players in the Consumer Financial Services,

Bargaining power of buyers of PNB Housing Finance,
Bargaining power of suppliers of PNB Housing Finance,
Threat of new entrants in the Consumer Financial Services industry
Threat of substitute products and services.

1. Threat of new entrants in Consumer Financial Services industry – if

there is strong threat of new entrants in the Consumer Financial Services
industry then current players will be willing to earn lower profits to
reduce the threats from new players

2. Threat of substitute products and services in Consumer Financial

Services sector – If the threat of substitute is high then PNB Housing
Finance has to either continuously invest into R&D or it risks losing out
to disruptors in the industry.

3. Bargaining power of suppliers in Consumer Financial Services – If

suppliers have strong bargaining power then they will extract higher
price from the PNB Housing Finance. It will impact the potential of
PNB Housing Finance to maintain above average profits in Consumer
Financial Services industry.
4. Bargaining power of buyers of PNB Housing Finance and Financial
sector – If the buyers have strong bargaining power then they usually
tend to drive price down thus limiting the potential of the PNB Housing
Finance to earn sustainable profits

5. Rivalry among existing players in Consumer Financial Services

industry – If competition is intense then it becomes difficult for existing
players such as PNB Housing Finance to earn sustainable profits.
SWOT ANALYSIS:
STRENGHTS

- First mover advantage in the increasingly crowded market place. The

new products are rapidly increasing PNB Housing Finance market share
in the Consumer Financial Services industry.
- Strong brand recognition - PNB Housing Finance products have strong
brand recognition in the Consumer Financial Services industry. This has
enabled the company to charge a premium compare to its competitors in
Consumer Financial Services industry.
- Market Leadership Position - PNB Housing Finance has a strong
market leadership position in the Consumer Financial Services industry.
It has helped the company to rapidly scale new products success.
WEAKNESSES OF PNB HOUSING FINANCE

- Loyalty among suppliers is low - Given the history of PNB Housing

Finance coming up with new innovations to drive down prices in the
supply chain.
- Low investments into PNB Housing Finance's customer oriented
services - This can lead to competitors gaining advantage in near future.
PNB Housing Finance needs to increase investment into research and
development especially in customer services oriented applications.
- High turnover of employees at the lower levels is also a concern for the
PNB Housing Finance . It can lead to higher salaries to maintain the
talent within the firm.
OPPORTUNITIES FOR PNB HOUSING FINANCE

- Accelerated technological innovations and advances are improving

industrial productivity, allowing suppliers to manufacture vast array of
products and services. This can help PNB Housing Finance to
significantly venture into adjacent products.

- Lowering of the cost of new product launches through third party retail
partners and dedicated social network. PNB Housing Finance can use
the emerging trend to start small before scaling up after initial success of
a new product.

- Lower inflation rate - The low inflation rate bring more stability in the
market, enable credit at lower interest rate to the customers of PNB
Housing Finance. This will increase the consumption of PNB Housing
Finance products.
THREATS TO PNB HOUSING FINANCE

- Growing technological expertise of local players in the export market -

One of the biggest threat of tie-up with the local players in the export
market for PNB Housing Finance is threat of losing IPR. The intellectual
property rights framework is not very strong in emerging markets
especially in China.

- Shortage of skilled human resources - Given the high turnover of

employees and increasing dependence on innovative solution, company
name can face skilled human resources challenges in the near future.

- Changing political environment with US and China trade war, Brexit

impacting European Union, and overall instability in the middle east can
impact PNB Housing Finance business both in local market and in
international market.
PESTEL

Political Factors that Impact Punjab National Bank

- Armed Conflict – There are no imminent threats to India from the

disruption in the business environment because of military policies,
terrorist threats and other political instability. Punjab National Bank has
experience of handling operations in difficult circumstances.

- Political stability in the existing markets – Punjab National Bank

operates in numerous countries so it has to make policies each country
based on the Regional Banks industry specific requirements. Given the
recent rise in populism across the world I believe that India can see
similar trends and may lead to greater instability in the India market.

- Other stakeholders such as non-government organizations, protest &

pressure groups, activist movements play critical role in policy making
in India. Punjab National Bank should closely collaborate with these
organizations so that it can contribute better to the community goals as
well as with corporate goals
Economic Factors that Impact Punjab National Bank

- Economic Performance of India – I believe the economic performance

of India in the near future 5-10 years will remain stable given –
government expenditure, stable demand because of disposable income,
and increasing investment into new industries.

- Exchange rate – The volatile exchange rate of India can impact Punjab
National Bank investment plans not only in the short term but also in the
long run.

- Inflation rate – The easy liquidity in the market post the great recession
of 2018 will lead to increasing inflation in the India economy.
Social Factors that Impact Punjab National Bank
- Attitude towards health and safety – With increasing liberalization the
attitude towards health and safety are getting lax. Punjab National Bank
needs to stay away from these attitudes as the cost of failure is too high
in India.

- Gender roles – The gender roles are evolving in India. Punjab National
Bank can test various concepts to cater to and support these evolving
gender roles in India society.

- Power structure – There is an increasing trend of income inequality in

India. This has altered the power structure that has been persistent in the
society for over last 6-7 decades.
Technological Factors that Impact Punjab National Bank

- Latest technology based innovations implemented by competitors of

Punjab National Bank – This can provide a good insight into what the
competitors are thinking and where Regional Banks business model
future is.

- Technology transfer and licensing issues for Punjab National Bank – In

the Financial sector there is no strong culture of technology transfer and
companies often are reluctant to transfer or license technologies for the
fear of creating competitors out of collaborators.
Environmental Factors that Impact Punjab National Bank
- Customer activism – Greater awareness among customers have also
put environmental factors at the center of Punjab National Bank strategy.
Customers expects Punjab National Bank to adhere to not only legal
standards but also to exceed them to become responsible stakeholder in
the community.

- Renewable technology is also another interesting area for Punjab

National Bank. It can leverage the trends in this sector. India is
providing subsidies to invest in the renewable sector.

- Recycling is fast emerging as a norm rather than a good thing to do in

India economy. Punjab National Bank has to make plans to adhere to
regulations and expectations in the Financial sector.
Legal Factors that Impact Punjab National Bank

- Data protection laws – Over the last decade data protection has
emerged as critical part of not only privacy issues but also intellectual
property rights. Punjab National Bank has to consider whether India
have a robust mechanism to protect against data breaches or not.

- Legal protection of intellectual property, patents, copyrights, and other

IPR rights in India. How Punjab National Bank will be impacted if there
are not enough protection.

- Time take for business cases in court – some countries even though
follow international norms but the time for resolution often run in years.
Punjab National Bank has to carefully consider average time of specific
cases before entering an international market.
CSR

Focus areas for CSR initiatives

The broad frame work for CSR initiatives recommended to be

undertaken by the Company would be as per section 135 and schedule
VII of Companies Act, 2013.
1. Hunger, Malnutrition and Health: Contribute towards eradicating
extreme hunger, malnutrition, promoting healthcare and sanitation, and
make available safe drinking water and general hygiene for the targeted
segment. Establishing day care centres for underprivileged and
differentially abled children.
2) Education: Promoting education for economically weaker
section/migratory construction site workers and their children, women
and differently abled and livelihood enhancement projects; monetary
and material contributions to academic institutions promoting education
for the underprivileged, with an aim of assisting students in their studies.
3) Gender Equality, Empowerment of Women and care for Senior
Citizens: Promoting gender equality and empowering women; setting up
homes and day care centres for women and orphans; assist/co-partner in
setting up of old age homes for senior citizens.
4) Others: In case of any natural calamity/disaster contribute towards
Prime minister relief fund or any specific fund maintained by
Central/state Government of India; measures for welfare and benefit of
armed forces veterans, war widows and their dependents.
CSR ACTIVITIES

The CSR activities are laid down under Schedule VII to the Companies
Act 2013, which may be included by the company in their CSR policy.
The said activities relate to –
Eradicating hunger, poverty and malnutrition, promoting preventive
health care and sanitation and making available safe drinking water;
• Promoting education, including special education and employment
enhancing vocation skills especially among children, women, elderly,
and the differently abled and livelihood enhancement projects;
• Setting up homes and hostels for women and orphans, setting up old
age homes, day care centres;
• Measures for the benefit of armed forces veterans, war widows and
their dependents;
• Contribution to the Prime Minister’s National Relief Fund.
CORPORATE GOVERNANCE
CORE VALUES OF CORPORATE GOVERNANCE

People First

Our people are our only assets.

We grow talent, work inclusively with humility, continuously learn from
our experience and past.
We enable high performance, recognize and reward only performance.
We give responsibility and demand accountability.
We work in teams and take complete ownership of our doings. Team
spirit is critical to us.
How can I help others ? Is our Team motto.
Customer-Centric

Where customers feel at home, build long term relationship – ‘Ghar Ki

Baat’.
We hand hold customers over the entire relationship.
Our business partners are our customers too.
We safeguard customers’ interest, give responsible advice.
We are empathetic and pro-active, We deliver” Atithi Deva Bhava”.
Our satisfied customers are our brand ambassadors.
Ethical Standards

We make no compromise in our professional ethics – ‘We do the right

things, We do things right.
We are transparent and compliant with the law of the land.
We encourage and respond to open communication.
We are fearless. We raise timely alarm.
We manage meaningful, relevant and engaging CSR.
We contribute to nation’s well-being.
BALANCE SHEET