PNB Housing Finance, a Punjab National Bank (PNB) subsidiary, has recently announced its plans for a rights issue, which is set to open on April 13, 2023, and close on April 27, 2023. The company has declared the rights issue price at Rs 275 per share.

Shares of the Lender opened at Rs 447.65, down 18.4% from the close price of Monday. At 12:30 pm today, the shares were trading almost at a 13% loss, at Rs 468.70.

Despite the sharp decline in the stock price, technical indicators suggest that PNB Housing Finance shares are trading in neither overbought nor oversold territory, with the relative strength index (RSI) at 52.2. However, the stock has a high beta of 1.4, indicating significant yearly volatility.

The rights issue will offer 29 rights equity shares for every 54 fully paid-up equity shares held on the record date, which is April 5, 2023. The company aims to issue 90,681,828 PNB Housing Finance shares in this issue worth Rs 2,493.76 crore. The issue is proposed to be listed on the Stock Exchanges, NSE and BSE on May 17, 2023.

The decline in the stock price can be attributed to profit booking as investors are not showing a strong appetite for the rights issue at the deep discount price. Analysts suggest that the stock looks weak based on the chart pattern, with immediate support at Rs 425 and further decline to Rs 370 per share levels in the near term possible.