Shares of PNB Housing Finance rose 4% on April 3 after Morgan Stanley “overweight” the financier, raising its price target by 32% to Rs 700.

Shares of the housing finance company were up 3.3% at Rs 530.4 on the BSE at 11:19 am.

Morgan Stanley said it studied the expected impact of the rights issue on its base case.

The board of PNB Housing Finance has approved a rights issue of about 9.06 crore shares at Rs 275 each to raise up to Rs 2,500 crore. The allotment ratio approved by the board of directors is 29:54, and eligible shareholders can receive 29 shares for every 54 shares they hold on the record date.

The recording date has been confirmed as April 5. The issue will open on April 13 and end on April 27. Morgan Stanley said its underlying profit for FY24-25 would grow by 8-9%.

The brokerage expects lower financing costs, partially offset by royalties.