PNB Housing Finance Share Crash: The reason why The Stock plunged 16% on the The Resignment of the CEO?
The shares of PNB Housing Finance suffered a free fall of more than 16 percent following the resignation of the MD and chief executive officer of the company, Girish Kousgi. This was a sudden withdrawal that caused panic among the investors and many of them tried to sell their portfolio which made the stock price crash.
What Happened?
GGirish Kousgi is the Managing Director and CEO of PNB Housing Finance who has resigned from the organization. According to the official statement, he is leaving because he wants to do other things. He has announced his resignation and this will take effect on 28th October and this implies that he will still serve in his position till that time.
The head of the company Nomination and Remuneration Committee, R Chandrashekharan, has stated that the company board would shortly initiate the process of a new CMD.
Why Did the Stock Drop So Much?
The action of resignation set off a huge sell-off of the stock. In Bombay stock exchange (BSE), the stock closed at 15.79 per cent down at 830.50 per share. In intraday trading, it dropped to the level of 823.95 an increase of 16.45 percent.
Most of brokerage firms consider that this is the backward step of the company. The same company had improved a great deal under the helm of Girish Kousgi. He was central in enhancing business activities and quality improvement of assets. His departure made the stock market fear in terms of the performance of the company and stability of its management.
Contributions that CMD brings to the company
CMD and CEO have been in transition and since last October they are owned by Girish Kousgi. During his tenure:
- PNB Housing Finance emerged as the third-largest housing finance company of India.
- He steered the company to high Net Interest Margin (NIM) of 3.7 per cent almost higher than what it was expected (3.6-3.65 per cent).
- The shares have tripled up, since his enrollment.
Nevertheless, on the same basis though this growth is very impressive, the stock has dropped by 11 percent in the past one month and now, the resignation has put further weight on this.
Stock Performance in the Last One Year
Now, what about the move of the stock in the last one year?:
- The highest Price of the stock in 2024 was 52 week high 1201.45 0.00 on 13 th September 2024.
- It declined to the level of 746.10 by 28 th February 2025, a 37.90 percent decrease relative to the highest point.
- It also represented the 52 week low of the stock.
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What Do Analysts Say?
According to the IndMoney data, it has 13 analysts who cover the stock, 1 a buy, 3 a hold, 1 a sell, and 8 a weak sell.
- There are 12 analysts who suggest that the stock should be bought.
- There is one analyst who is recommending the stock to be held.
- Its upper bound target price is 1386 and lower bound target price is 1020rs.
Conclusion
The abrupt exiting of the CEO of PNB Housing Finance has definitely helped in spooking the investors. Although the long term fundamentals of the business are still relatively solid, there has been panic selling due to uncertainty in the leadership. Question now is who is to succeed and how transition will affect the performance of the company in the subsequent quarters, as is being monitored by the investors.