Housing Development Finance Corporation

Last updated

Housing Development Finance Corporation
Company type Public
BSE: 500010
NSE: HDFC
BSE SENSEX Constituent
NSE NIFTY 50 Constituent
ISIN INE001A01036
Industry Financial services
Founded1977;47 years ago (1977)
Defunct1 July 2023;8 months ago (1 July 2023)
FateMerged with HDFC Bank [1]
Headquarters Mumbai, Maharashtra, India
Area served
India
Key people
Products Mortgage loans
RevenueIncrease2.svg₹152,997.64 crore (US$19 billion) [3]  (2023)
Increase2.svg₹32,130.55 crore (US$4.0 billion) [3]  (2023)
Increase2.svg₹26,160.90 crore (US$3.3 billion) [3]  (2023)
AUM Increase2.svg₹432,084.97 crore (US$54 billion) [4]
Total assets Increase2.svg₹1,091,528.84 crore (US$140 billion) [5]  (2023)
Total equity Increase2.svg₹201,474.50 crore (US$25 billion) [5]  (2023)
Number of employees
3,226 (2021) [6]
Subsidiaries HDFC Bank
HDFC ERGO
HDFC Life
HDFC Mutual Fund [7]
HDFC Credila [8]
Website www.hdfc.com

Housing Development Finance Corporation was an Indian private sector mortgage lender based in Mumbai. [9] [10] It was the biggest housing finance company in India. [11] It also had a presence in banking, life and general insurance, asset management, venture capital and deposits through its associate and subsidiary companies. [9]

Contents

In July 2023, the mortgage lender merged with HDFC Bank, [12] the country's largest private sector bank, in a bid to expand it's portfolio and to gain access to a larger customer base. [13]

History

It was founded in 1977 with the support from India's business community, [14] [15] as the first specialised mortgage company in India and main company among HDFC group of companies. [14] [16] HDFC was promoted by the Industrial Credit and Investment Corporation of India (ICICI). [17] Hasmukhbhai Parekh played a key role in the foundation of this company which started with the main aim of solving the housing shortage in India and started rising steadily thereafter. [14]

In 2000, HDFC Asset Management Company launched its mutual fund schemes. [17] In the same year, IRDA granted registration to HDFC Standard Life Insurance, as the first private sector life insurance company in India. Currently it operates in India, Kuwait, Oman, Qatar, Saudi Arabia, Singapore, United Arab Emirates and United Kingdom. [14]

Products and services

Mortgage

The company provides housing finance to individuals and corporates for purchase/construction of residential houses. [14] [18] The type of loans offered by company include loans for purchase and construction of a residential units, purchase of land, home improvement loans, home extension loans, non-residential premise loans for professionals and loan against property and repayment options include step-up repayment facility and flexible loan instalment plan. [14] It is one of the largest providers of housing loans in India. [14] [18] In its Annual Report for financial year 2012–13, the company has disclosed that it has disbursed approx. INR 456,000 crores in 35 years of its existence for a total of 4.4 million housing units. [2]

The average loan profile amounts to INR 2.18 million (US$35,160) which lasts for about 13 years and covers approx. 65% of actual property value. From the year 2000,the company started offering housing loans on the Internet becoming first company to do so. [14]

Life insurance

The company has been providing life insurance since the year 2000, through its subsidiary HDFC Standard Life Insurance company Limited. It offers 33 individual products and 8 group products. It uses the HDFC group network to cross sell by offering customized products. It operates out of 451 offices across India serving over 965 locations. It had a market share of 4.6% of life insurance business in India as of 30 September 2013. [16] HDFC Life has over 15,000 employees. [19]

General insurance

The company offers general insurance products such as:

Mutual funds

HDFC provides mutual fund services through its subsidiary HDFC Asset Management accountingy Limited. The average assets under management (AUM) of HDFC Mutual Fund for the quarter Jul-13 to Sep-13 was INR 1.03 trillion. [20]

Operations

HDFC's distribution network spans 396 outlets (including 109 offices of HDFC's distribution company HDFC Sales Private Limited) which cater to approx. 2,400 towns and cities spread across India. [9] To cater to Non-Resident Indians, HDFC has offices in London, Singapore and Dubai [14] and service associates in Middle East countries. [9]

The first overseas office was opened in Dubai in 1996 and in 2000's was expanded to London and Singapore. [14]

In addition, HDFC covers over 90 locations through its outreach programmes. HDFC's marketing efforts continue to be concentrated on developing a stronger distribution network. Home loans are also sourced through HDFC Sales, HDFC Bank Limited and other third party Direct selling Agents (DSA). The corporation has 232 institutional owners and shareholders filing through 13D/G or 13F forms with the Securities Exchange Commission. [21] Largest investor amongst them is Vanguard International Growth Fund. [22]

Major subsidiaries and associates

HDFC's key associate and subsidiary companies included HDFC Bank, HDFC Life Insurance Company, HDFC ERGO General Insurance Company, HDFC Asset Management Company, and HDFC Capital Advisors. [16]

HDFC Bank

HDFC holds 26.14% of shares in HDFC Bank. HDFC Bank sources home loans for HDFC for a fee. [23] The key business areas of HDFC Bank are wholesale and retail banking and treasury operations. As of April 2023, its market capitalisation was ₹941,386 crore (US$120 billion), making it India's third largest publicly-traded company. [24]

HDFC Life Insurance Company

HDFC holds approx. 48.7% of shares in HDFC Life [25] and is the sole promoter of the company, as of May 2023. [26] In September 2013, it was ranked third in terms of market share of private life insurance companies in India. [16] On the same date, it had a network of approx. 72,000 financial consultants to sell its policies. [16]

HDFC Asset Management Company

HDFC formed HDFC Mutual Fund as a joint venture with Standard Life Investments in 1999. HDFC Asset Management Company is the investment manager of HDFC Mutual Fund's schemes. [27] HDFC holds a 52.6% stake and is the sole promoter of the company as of June 2023. [28] HDFC AMC manages 68 schemes comprising debt, equity, exchange traded fund and fund of fund schemes. [16] Average assets under management (AUM) as at the end of March 2022 is ₹4.07553 trillion. It is ranked first in the industry in India on the basis of average assets under management.

HDFC ERGO General Insurance Company

HDFC formed this General Insurance company with ERGO Insurance Group. HDFC holds 50.5% and ERGO holds 26% of the shares. By the end of September 2013, its Market share in General Insurance stood at 4.1% (overall) in terms of gross gross direct premium in first half year of FY 2013–14. [16] The total employee strength of the company as of March 31, 2013 was 1,389. [19]

HDFC Capital Advisors

Established in 2016, HDFC Capital Advisors is a private equity real estate firm. As of April 2023, HDFC holds 90% stake in the company while Abu Dhabi Investment Authority holds the remaining 10%. [29] In 2022, two wholly-owned subsidiaries of HDFC, viz. HDFC Property Ventures and HDFC Venture Capital, were merged into HDFC Capital Advisors. [30]

Former subsidiaries and associates

HDFC Credila Financial Services

HDFC Credila is a non-banking finance company and was the first Indian lender to exclusively focus on education loans. [31] The company lends to under-graduate and post-graduate students studying in India or abroad. HDFC held about 90% shares in this company. [16] In 2023, HDFC sold a majority stake in HDFC Credila to a consortium of private equity firms, led by Baring EQT and ChrysCapital, for ₹9,060 crore (US$1.1 billion). [32]

HDFC RED

Launched in 2010, HDFC held a 100% stake in HDFC RED, a real estate online listings platform operating under HDFC Developers Ltd. The company focuses on real estate, avoiding resale and rental services. [33] [16] In 2018, HDFC sold HDFC RED and HDFC Realty to Quikr for ₹357 crore (US$54.82 million). [34]

GRUH Finance

HDFC held approx. 59% in GRUH, a housing finance company offering loans to individuals for purchase, construction and renovation of dwelling units. GRUH also offers loans to the self-employed segment where formal income proofs are not available. [16] It has a retail network of 136 offices across 7 states in India. [16]

On 17 October 2019, GRUH Finance was formally merged into Bandhan Bank, giving HDFC a 14.9% stake in Bandhan.

Listings and shareholding

Listing: The equity shares of HDFC are listed on Bombay Stock Exchange where it is a constituent of the BSE SENSEX index, [35] and the National Stock Exchange of India where it is a constituent of the S&P CNX Nifty. [36]

Shareholding: On 30 September 2013, 73.09% of the equity shares of the company were owned by the Foreign Institutional Investors (FII). Around 185,000 individual public shareholders own approx. 9.25% of its shares. The remaining 17.66% shares are owned by others. [37]

Shareholders (as of 30-September-2013)Shareholding [37]
Promoter Group00.00%
Foreign Institutional Investors (FII)73.09%
Individual shareholders09.25%
Insurance companies08.42%
Mutual Funds/UTI 03.04%
Corporate Bodies02.77%
Financial Institutions/Banks 02.11%
NRI/OCB/FDI/Others01.32%
Total100.0%

Employees

As of 31 March 2013, the company had 1,833 employees, out of which 22% were women. [18] The company incurred INR 5.28 billion on employee benefit expenses for the financial year 2012–13. [2]
For FY 2012–13, the company reported a per employee profit of US$484,000 and per employee assets of US$18.5 million. [16]
HDFC's Training Centre is located in Lonavla Mumbai and it was established in 1989. It is mainly used for training programmes, workshops, conferences and strategy meetings. [38]

Awards and recognition

See also

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References

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  2. 1 2 3 "Annual Report 2012-13" (PDF). HDFC. Retrieved 20 November 2013.
  3. 1 2 3 "Housing Development Finance Corporation Consolidated Profit & Loss account, Housing Development Finance Corporation Financial Statement & Accounts" (PDF). www.bseindia.com.
  4. ↑ "Housing Development Finance Corporation - Assets under management, May 31, 2022".
  5. 1 2 "Housing Development Finance Corporation Consolidated Balance Sheet, Housing Development Finance Corporation Financial Statement & Accounts" (PDF). www.bseindia.com.
  6. ↑ Housing Development Finance Corporation Annual Report 2021
  7. ↑ "About Us – HDFC Asset Management Company in India – HDFC Mutual Fund".
  8. ↑ "About HDFC Credila, an HDFC Ltd | Credila". www.hdfccredila.com.
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  13. ↑ "Explained: The main reasons behind the merger of HDFC and HDFC Bank". Business Today. 4 April 2022. Archived from the original on 27 April 2022. Retrieved 7 January 2024.
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  31. ↑ "Education Loan | HDFC Credila". hdfccredila.com.
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  33. ↑ "Burning cash on advertising isn't a wise strategy for housing portals: HDFC RED CEO Sohel IS". Forbes . 7 April 2017. Retrieved 20 May 2017.
  34. ↑ "Quikr buys HDFC Red and Realty for Rs 357 crore". Moneycontrol. 14 February 2018. Retrieved 27 June 2023.
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  36. ↑ "Download List of CNX Nifty stocks (.csv)". NSE India. Retrieved 16 November 2013.
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