Housing Development Finance Corporation Limited (HDFC)

An Indian private development finance organization with its headquarters in Mumbai is called Housing Development Finance Corporation Limited (HDFC). It is a significant provider of house financing in India. Additionally, it operates in the banking industry and provides life and insurance products, wealth management, venture funding, real estate, educational loans, and deposits.

It was established in 1977 with the help of the Indian business community, and it is the flagship company of the Housing Development Finance Corporation Limited group of companies. The Industrial Investment and Credit Corporation of India promoted Housing Development Finance Corporation Limited (ICICI). Hasmukhbhai Parekh was crucial in the establishment of this business, which initially set out to address the housing crisis in India and then grew rapidly. 

The mutual fund schemes of Housing Development Finance Corporation Limited Asset Management were introduced in 2000.

As the country’s first private sector provider of life insurance, the IRDA registered Housing Development Finance Corporation Limited Standard Life Insurance in the same year. India, Kuwait, Oman, Qatar, Saudi Arabia, Singapore, the United Arab Emirates, and the United Kingdom are the current countries where it is active.

For the purchase or construction of residential homes, the corporation offers housing financing to both private individuals and businesses. Loans for the purchase and construction of residential units, loans for the purchase of land, loans for home improvements, loans for home extensions, loans for non-residential premises for professionals, and loans secured by property are among the types of loans offered by the company. Payout choices include a step-up payout facility as well as a flexible loan installment plan. It is one of India’s biggest lenders of housing loans. The organization reported in its Annual Report for the fiscal year 2012–13 that over the course of its 35-year existence, it has disbursed over INR 456,000 crores for the construction of 4.4 million units of housing. The typical loan profile is worth INR 2.18 million ($35,160), has a term of roughly 13 years, and covers about 65% of the property’s actual value. In 2000, the company became the first to offer home loans online.

What are its operations?

A total of 2,400 towns and cities in India are served by Housing Development Finance Corporation Limited’s distribution network, which consists of 396 outlets and 109 offices of Housing Development Finance Corporation Limited Sales Private Limited. The offices of Housing Development Finance Corporation Limited are located in London, Singapore, and Dubai to serve non-resident Indians as well as service partners in Middle Eastern nations. In 1996, Dubai became the site of the first foreign office, which eventually expanded to London and Singapore.  Additionally, Housing Development Finance Corporation Limited’s outreach programs reach approximately 90 places. The focus of Housing Development Finance Corporation Limited’s marketing initiatives is still on constructing a better distribution network. Additionally, home loans can be obtained from Housing Development Finance Corporation Limited Sales, Housing Development Finance Corporation Limited Bank Limited, and other independent Direct Selling Agents (DSA).

What are its major subsidiaries and associates?

HDFC Bank Limited, HDFC Standard Life Insurance Company Limited, HDFC ERGO General Insurance Company Limited, HDFC Asset Management Company Limited, GRUH Finance, HDFC Venture Capital Limited, HDFC RED, HDFC Sales Private Limited, and Credila Financial Services Private Limited are some of Housing Development Finance Corporation Limited’s most crucial associate and subsidiary businesses. 

Bank Housing Development Finance Corporation Limited

In Housing Development Finance Corporation Limited Bank, Housing Development Finance Corporation Limited owns 26.14% of the stock. For a charge, Housing Development Finance Corporation Limited Bank sources mortgages for Housing Development Finance Corporation Limited.

Retail and wholesale banking, as well as treasury functions, make up Housing Development Finance Corporation Limited Bank’s main business segments. With a market value of Rs 1.5 trillion (approximately USD 27.31 billion) as of March 31, 2013, it was India’s seventh-largest publicly traded corporation.

HDFC Standard Life Insurance company limited

About 51.7% of the shares in Housing Development Finance Corporation Limited Life are owned by Housing Development Finance Corporation Limited. According to the most recent financial statements, Standard Life owns 49% of the shares. It held the third-highest market share among private life insurance providers in India as of September 2013. As of that date, it has a network of over 72,000 financial advisors selling its plans. 

HDFC Asset Management

Together with Standard Life Investments, Housing Development Finance Corporation Limited founded this mutual fund firm, and as of September 2022, Housing Development Finance Corporation Limited owned roughly 62.8% of its shares. It oversees 68 schemes, including fund-of-funds, exchange-traded funds, debt, and equity schemes.

HDFC Property Fund

It first debuted in 2005. The “Housing Development Finance Corporation Limited India Real Estate Fund,” a closed-end fund for domestic investors, was the company’s debut program. Housing Development Finance Corporation Limited Venture Capital Limited is in charge of this scheme’s financial resources. Another plan is the “HIREF International Fund,” a closed-end fund for foreign investors.

HDFC RED

Housing Development Finance Corporation Limited Developers Ltd., a real estate internet listing platform that was established in 2010, owns 100% of Housing Development Finance Corporation Limited RED. The business stays away from rental and resale services in favor of the real estate.

HDFC Financial Services

A non-banking financial institution, Housing Development Finance Corporation Limited Credila, was the first in India to specialize only in student loan financing.

90% of the company’s shares The average student loan amount disbursed is around INR 880,000.

Listing: The equity shares of Housing Development Finance Corporation Limited (HDFC) are listed on the National Stock Exchange of India and the Bombay Stock Exchange, where they are both components of the S&P CNX Nifty and the BSE SENSEX index, respectively. 

What is HDFC’s Shareholding pattern?

The following is its Shareholding pattern 

FII – 67.21

DII – 21.71%

Public – 11.08%

Promoters – 0

SWOT analysis 

Strength

1.  Company with high TTM EPS Growth
2. Growth in Quarterly Net Profit with increasing Profit Margin (YoY).
3. Book Value per share Improving for the last 2 years.
4. FII / FPI or Institutions increasing their shareholding

Weakness 

1. Subsidiary Companies with High Debt
2. Inefficient use of capital to generate profits 
3. Poor cash generated from core business 

Opportunities 

1. Brokers upgraded recommendation or target prices in the past three months
2. Upcoming results for Nifty500 companies with previous quarter net profit growth greater than 10% YoY and QoQ
3. Upcoming results with Rising Delivery Volumes
4. 30 Day SMA crossing over 200 Day SMA, and current price greater than open
5. High Momentum Scores (Technical Scores greater than 50)
6. Negative to Positive growth in Sales and Profit with Strong Price Momentum
7. Decrease in Provision in recent results
8. High trading Volume 

Threats

1. Competitive financial service companies
2. Changing political/ government policies

Currently, housing development finance corporation LTD. is trading at Rs 2619.25.