India Ratings and Research stated that the upgrade reflects the agency’s expectation of PNB Housing Finance (PNBHF) receiving timely support in terms of liquidity and equity from Punjab National Bank (PNB), with PNB maintaining its stake in PNBHF and sharing the brand name.

The rating also reflects PNBHF’s position among India’s top housing financiers, having seen multiple business cycles.

Moreover, PNBHF has demonstrated consistent improvement in profitability and asset quality and has achieved granularisation of the loan book. It has raised funding at competitive rates and maintained adequate liquidity buffers.

India Ratings expects the entity’s credit cost to remain modest in the near to medium, given the tightened underwriting norms and retail & granular nature of its loan book.

However, the performance of its affordable housing finance portfolio, which is at a nascent stage with high growth, remains a monitorable.

PNBHF is a deposit-accepting housing finance company registered under NHB and the Companies Act, 1956. It provides housing loans to individuals for the purchase, construction, repair, and upgrade of houses. It also provides loans against property, loans for commercial property, and loans for purchase of residential plots, and real estate development loans. PNBHF has 356 branches/outreaches mainly located across metro, Tier I and Tier II cities across India. It had dedicated 198 branches for affordable business as on 30 September 2025.