Shares of PNB Housing Finance dipped over 5 percent on Friday after Punjab National Bank (PNB) has called off the deal to sell its stake in the company.

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"PNB and Varde have mutually agreed to terminate the share purchase agreement (SPA), and all rights and obligations of the parties thereunder with immediate effect," PNB Housing Finance said in a regulatory filing.

PNB Housing fell as much as 5.4 percent to hit the day's low of Rs 717 per share on the BSE. At 10:10 AM, the stock was trading 3.9 percent lower at Rs 729 as compared to a 0.5 percent (196 points) gain in the Sensex at 37,585. Meanwhile, Punjab National Bank slipped nearly 2 percent to Rs 79.50 intra-day trade after the announcement. It was currently trading 0.8 percent lower at Rs 80.50.

PNB had entered into an agreement for sale of 1 crore equity shares held in PNB Housing Finance to Varde Holdings at Rs 850 per share aggregating to Rs 925.80 crore.

PNB further informed that post-termination of the SPA, it will continue to be the sole promoter of PNB Housing and stay strategically invested in the Company.

"PNB strongly believes in the growth story of the company and will continue to support its business and management in pursuing their growth plans. Further, PNB will continue to provide branding support as long as PNB remains the promoter of the Company," it added.

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First Published:May 17, 2019 11:35 AM IST