“Because the son grows older, he acquires his father’s enterprise,” is what Deepak Parekh stated on April 4, 2022, when the housing finance large HDFC had first introduced it will merge with its subsidiary HDFC Financial institution.
Saturday, July 1, 2023, will mark an finish of an period of kinds as this merger is about to finish. The son will take over the mother or father, and the nation’s first and the most important housing finance firm will stop to exist. However, it is going to even be an finish of an period for Deepak Parekh, the person who made HDFC a family identify and helped thousands and thousands of middle-class Indians purchase their very own properties, as he hangs up his boots after 46 years on the agency.
Housing Growth Finance Corp was arrange by Deepak Parekh’s uncle H.T. Parekh in 1977. Deepak was already having a profitable profession as a banker with Chase Manhattan Financial institution when he determined to come back again to India and be part of HDFC in 1978.
Again then, HDFC was a small lending agency. These had been additionally the years when for a lot of Indian center class, shopping for their very own residence was a dream.
By formalising the house mortgage course of and bringing in transparency, HDFC fulfilled that dream of thousands and thousands of bizarre Indians. At the moment, virtually each scheduled industrial financial institution and some non-bank monetary establishments supply residence loans. However, within the Nineteen Eighties and even Nineteen Nineties, HDFC was the go-to establishment if somebody needed a house mortgage and it stays the most important within the mortgage enterprise even in the present day, 46 years later.
For the 12 months ending March 2023, HDFC reported a internet revenue of Rs 16,239 crore. Its belongings below administration stood at over Rs 7.2 lakh crore. The inventory ended at Rs 2,821.50, up 1.5 per cent and had a market cap of Rs 5.22 lakh crore.
The merger will catapult HDFC Financial institution to change into the world’s fourth largest with a mixed market cap of Rs 14.74 lakh crore, rivalling the US and Chinese language banking giants like JP Morgan Chase, Financial institution of America and Industrial and Industrial Financial institution of China.
“Little doubt, the housing finance business is a aggressive one in the present day. But, HDFC will all the time have the excellence of being the establishment that launched retail housing finance to the nation. Through the years, we’ve got, in no small measure, helped chart the course for housing finance to be recognised as an integral a part of improvement of the nation,” Parekh wrote in his closing letter to shareholders.
“House loans will now be complemented with HDFC Financial institution’s core strengths — its gross sales engine, execution capabilities at scale and deep insights on shopper behaviour. For HDFC Financial institution, a house mortgage buyer marks the start of a journey of getting a buyer in perpetuity,” he additional wrote.
Through the years, HDFC expanded its horizons. It arrange a financial institution, which grew to become the most important within the personal sector in India. It arrange a mutual fund enterprise, which grew to become the most important asset administration firm (at the moment the third largest AMC). It additionally entered the fairness broking enterprise and began basic in addition to life insurance coverage arms with worldwide companions.
Whereas HDFC has gone from power to power over the a long time, Parekh has additionally been a part of a number of committees, changing into the go-to man of kinds for his information and advise on vital issues.
As an illustration, he was appointed to the board of Satyam Computer systems again in 2009 when the then fourth largest software program companies exporter was hit by an accounting fraud by its promoters. Parekh together with different board members, performed a key position within the revival and subsequent acquisition of the Satyam by Tech Mahindra.
Parekh additionally chaired the high-level committee that was shaped in 1999 to revive UTI’s US-64 scheme.
“It’s my time to hold my boots with each anticipation and hope for the longer term. Whereas this will likely be my final communication to shareholders of HDFC, relaxation assured we now stride tall into a really thrilling way forward for development and prosperity,” is how Parekh summed up in his letter to shareholders.
The merger of HDFC with HDFC Financial institution is the most important such deal in company India. As soon as full, HDFC Financial institution may have no promoter and will likely be totally held by public shareholders.
Sashidhar Jagdishan, the MD and CEO of HDFC Financial institution, has termed the deal as “defining occasion in our journey.”
“As we navigate the trail forward, we are going to embrace challenges as alternatives, study from our experiences, and try to be the benchmark of success and integrity within the monetary companies business,” he stated.
