A glimpse into the house that Deepak Parekh built
MUMBAI : In 1978, Deepak Parekh joined BSE-S0003013" data-name="Housing Development Finance Corp">Housing Development Finance Corp. (HDFC) Ltd, a housing finance company set up by his uncle, and built it out. When India opened financial services in the 1990s, he led the group’s diversification into many sectors.
It wasn’t just about registering a presence, it was about making an indelible mark. Before its merger with HDFC Bank Ltd, effective from 1 July, HDFC had 21 subsidiaries or associate companies. All the significant ones are leaders in large, essential, and expanding sectors of financial services.
Besides Parekh, credit should also go to leaders like Aditya Puri, Deepak Satwalekar, Keki Mistry, Renu Sud Karnad, and Milind Barve, who all had long stints at the top. Sashidhar Jagdishan, the managing director and chief executive of HDFC Bank, has been with the bank since 1996. In the bank’s 2021-22 annual report, he outlined reasons for the merger: “…only 2% of our customers source their home loans through us, while 5% do it from other institutions.
The latter is equivalent to the size of our retail book. Home loan customers typically keep deposits that are 5 to 7 times that of other retail customers. And about 70% of HDFC’s customers do not bank with us." In other words, HDFC Bank was not maximizing the housing loan space by itself.
And the HDFC group was not maximizing the network possibilities that HDFC customers presented. The regulatory reasons to keep both firms separate were anyway diminishing. It made sense to pass the baton from the ‘parent’ to the ‘child’—both immense performers in their own right.
Read more on livemint.com
