Re: {LONGTERMINVESTORS} HDFC..New thread..
RAJESH DESAI
CEO SPOTLIGHT: Keki Mistry, cricket buff after office hours
Published on Thu, Aug 04, 2011 at 11:52 | Source : Moneycontrol.com
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Santosh Nair
moneycontrol.com
They are the people in the driver's seat at India Inc, steering the company on the growth path, motivating staff, managing shareholder expectations and playing brand ambassador. But have you wondered what is it that drives these high achievers and where are they coming from?
Moneycontrol.com helps you get to know some of the chief executives better, through our weekly feature CEO Spotlight, where we get the top bosses to speak about their careers, likes, regrets, vision and aspirations.
We flag off this series with the usually tough talking Keki Mistry, vice-chairman and chief executive officer of Housing Development Finance Corporation . Starting as an assistant manager in the accounts department in 1981, Mistry has now spent close to three decades at HDFC. What very few people would know about him is that Mistry is very fond of Hindi music, and trained as a boxer while at college, even though it is cricket that excites him more.
If not a career in the financial services industry, Mr Mistry would have loved to represent India in cricket. Read on more about Mistry’s life beyond the corner room office.
Below is the verbatim transcript of the interview. Also watch the attached videos.
Q: You have worked your way up the ranks in HDFC, how has the journey so far been?
A: Very good. I started in October of 1981, so it is almost 30 years now. I was with Deutsche for a couple of years, not even a couple of years, year and half or so and then I finished my CA. At that time HDFC was looking for someone in the finance department, so I joined as assistant manager, accounts. I remember my first salary was Rs 2620. In 1985, I became Manager. Then in 1989, I became General Manager, in 1993, I became Executive Director and from 1993 till 2011, I have been on the board, so its 18 years on the board.
Q: Is leadership is something that came naturally to you or did you pick it up over the years?
A: I don’t think anything you can pick up; these things come naturally to you. Obviously there are a few things that you can pick up but they have to come naturally to you. So I think leadership is really more about letting people be what they are, hearing suggestions helping them, guiding them but at the end of the day leaving them to do the things the way they would probably do it best, after all they are all professionals.
Q: How would you describe your style of management?
A: Very proactive but a little bit hands-off. I would have certain broad criteria which you are required to perform like for example we have corporate goals, so we have to make sure that those corporate goals are attained all the time and that gives credibility to the company, it gives credibility to investors. Then those corporate goals are then sort of decimated or passed on to people. So whether it is business, whether it is recoveries, whether it is funding, whether it is deposits, whatever area you look at, you leave it to the individual, there is a target given to him and if he has problem in achieving that target then we have to discuss it otherwise its pretty much left alone. You would of course get suggestions, ideas but the basic approach has to be hands-off and proactive.
Q: Every leader is unique yet there are some basic traits that go into making of a successful leader. What according to you are two traits that every good leader must have?
A: One is the ability to listen, that’s the most important thing, and not just impose your view on people. I have a very flexible approach, so if someone gives me an idea which is different from what my idea is, I would be very happy to say that what I thought was wrong and what he thinks is right and change. So that’s one and the other is to treat each individual separately. What you are is different from what somebody else is and what somebody else is different from what a third guy is. Each person has his own ego, has his own way of behaving, his own wants, his own wishes, his own desires. So you have got to treat each person as an individual.
Q: What's your vision for HDFC say 10 years from now?
A: We have as I said articulated very clearly every year what we want to achieve. There are certain basic parameters that we want to achieve and it’s a vision that keeps changing all the time. In a sense that the broad parameters are the same but over a period of time things worked out, markets change, the external environment change, you need to adapt to that. I would say HDFC has become a financial conglomerate, we will continue to be a large financial conglomerate. We could look at one or two additional lines of businesses. Ten years from now we would have probably a listed life insurance company, a listed general insurance company. Presumably there will be a holding company structure.
There was in fact a report on a working group report on holding companies, so HDFC would continue to be where it is, as the leader in the financial services business, but with probably one or two businesses below it and with several listed companies. The other vision is much higher market cap. There are various ways you can measure success, but to me success is market capitalization. So if your market capitalization increases then effectively it takes into account everything else. The market recognizes all the good and all the bad that you do and that gets reflected in market cap.
Q: Who are the leaders that you regard highly?
A: Deepak Parekh was the one who helped me through my career, so obviously I have very high regards for him. I also have very high regards for H.T. Parekh, extremely high regards for H.T. Parekh. When I joined in 1981 he was there; always very focused, very simple man. So I would say H.T. Parekh, Deepak Parekh would probably be the two people I would look up to as leaders.
Q: What would your advice be for the youngsters aspiring to be in leadership positions?
A: Try and be perseverance because you cannot always succeed. There are times when success seems very far away. There are times when you don’t sleep in the night because you are thinking of a problem which is very eminent so one must learn to relax because you can’t carry your problems through and work on it the whole night, you get more jumbled. Things become more clear when you get up in the morning and start thinking about it. Two is, don’t give up, never give up. If there is something which you are not successful first time do it a second time, if you are not successful the second time do at third time. But if you have the vision, commitment or the belief that it is going to happen then don’t give up, just persevere, just continue and it will happen.
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EQUITY BULL
RAJESH DESAI
Dear Sir/Madam,
Please find the report for HDFC Limited.
Key Rationale
ü Market leader in the Mortgage Finance Industry.
ü Strong management.
ü Resilient margins due to high pricing power, funding mix flexibility & minimal ALM gaps.
ü Strong Asset Quality with adequately capitalized books.
ü Good Dividend paying history.
ü Strategic investments yielding good returns.
Valuation & Recommendation
At INR 646, the stock is trading at 4.3x FY13 core book value and 18.6x FY13 core earnings justifying consistent and quality of earnings. We valued the mortgage business at INR 497 per share (5x on FY13e core book). We initiate on HDFC ltd with a BUY rating on the stock with price target of INR 746 arrived at by SOTP valuation.
Regards,
Team Microsec Research
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EQUITY BULL
RAJESH DESAI
Ideating on home loan products; rate hikes not over: HDFC
Published on Fri, Aug 19, 2011 at 12:42 | Source : CNBC-TV18
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When ICICI Bank announced a new home loan product that offers repayment option at fixed rates for the first 2 years, many rivals raised an eyebrow at the "teaser rate" implications. Will this move force other banks to follow suit? Speaking to CNBC-TV 18, Keki Mistry, Vice Chairman and CEO, HDFC --one of the closest rival in the home loan segment-- said they too have plans in the drawing board, but refused to divulge details.
Below is edited transcript of the interview. Also watch the accompanying video.
Q: Announcement of a product like this stage does it signify
that the industry is looking at the end of hiking rates how should we
understand this from an interest rate trajectory point of view.
A;
Personally, I don’t think we have reached the absolute peak of the
interest rate cycle. We probably have one or maybe two more interest
rate hikes still pending-- maybe one. Inflation numbers still have not
come down to the level that RBI would like to see. So in September, when
RBI has the credit policy, I would expect 25 basis points increase.
This is now really to my mind probably going to be the peak.
Q: HDFC itself has discontinued such a scheme in late of
2010 Is there any possibility that you too would cross over the line
and introduce a similar policy?
A: We have a number of
products. You keep innovating; you keep working through and trying to
figure out which product would work well in the market. There are a
couple of products which are in the drawing board. We have to wait and
see what shape they take.
Q: They would be fixed or floating?
A: We will be looking at options. Let us see, nothing is fixed.
Q: Wouldn’t this attract the RBI’s stricter provisioning norms?
A: It does not apply to any special loan scheme. I am not aware of the rates that ICICI Bank is giving on fixed as well as floating rate. For a product, if you offer an interest rate lower than your normal product in the initial years, then the teaser loan will attract 2% provisioning.
Q: What if it is at the same rate?
A: If it is at the same rate, it probably will not attract 2% provisioning. This clarification needs to be taken from the regulator.
Q: Assuming another rate hike and if that gets passed on, would there be a discrepancy of rates on the fixed rate product and new loans that would be issued?
A: The borrower has to take a call on that.
Q: What would be your view from the provisioning perspective?
A: From the provisioning angle, if the rates go up and are passed on to the consumer, then the bank, which issued a product like this, would probably have to increase their fixed rate loan again.
Q: Is there a possibility of such a scheme resulting in increase delinquencies, maybe not immediately, but later? Previously, when these teaser loans were introduced, there was an increase in delinquencies.
A: At the end of the day, delinquencies are a function of the way the appraisal process has been done. If you operate the loan taking into account that the interest rate can go higher over the life of the loan, then you are fine. It depends on the appraisal. In the initial years, the loan appraisal was always done on the basis of higher rate and not the lower rate.
Q: Last time around, we had a lot of delinquencies coming in from personal product loans. Personal loans turned bad. This time, some teaser loans were given at 8% and with those loans floating now; we are close to 11.5% – 11.75%, which is a 50% increase. The number of EMIs also cannot be increased because of the person’s age. Wouldn’t this have a seminal impact on the disposable income?
A: Initially when the teaser loans were given, it was 8.5% and not 8%. When 8.5% moves to 11% or 11.25% in the period of two-and-a-half and three years, the borrower income goes higher. Also a part of the loan has already been paid back with monthly instalments, which has a principle component. Therefore, with every passing month, the principle component of the loan keeps declining.
The appraisal was done expecting interest rates to go higher. We have not seen any significant increase in delinquencies at the time of high interest rate. During 2008-2009, interest rates in India were higher than today. That time, liquidity in the system had almost completely died out.
For the entire banking system, we didn’t see any significant increase in non performing loans. In HDFC, the percentage of non performing loans was lower than what it was in the previous year at that time for 26 quarters in a row. I do not see an increase in the delinquencies.
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EQUITY BULL
RAJESH DESAI
28.3% growth in the Gross premium underwritten by HDFC ERGO in July 2011
The gross premium underwritten by HDFC ERGO general insurance grew by 28.3% to Rs 145.25 crore from Rs 113.24 crore in July 2010.
HDFC ERGO General cornered a market share of 3.2% in the total premium collection of the non life insurance sector in July 2011, higher than the market share of 2.7% in June 2011.
The public non-life insurers reported a premium collection of Rs 2645.40 crore, up by 20.4% and the private players underwritten premium worth of Rs 1954.61 crore, up by 16.0% during July 2011.
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EQUITY BULL
RAJESH DESAI
New NBFC norms won't impact us, says HDFC
The Reserve Bank of India (RBI) on Monday released the Usha Thorat committee report on non-banking finance companies (NBFCs).
In an interview with CNBC-TV18’s Latha Venkatesh, Keki Mistry, vice chairman and chief executive officer (CEO), HDFC said, he doesn’t see any impact of this on the company. “We are not NBFC. We are a housing finance company,” he added.
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Also read: RBI releases report on NBFC issues
Below is the edited transcript of the interview. Also watch the accompanying video.
Q: Will this affect? Would it be that HDFC reports to National Housing Bank (NHB), so you all are not covered by this?
A: That’s right. We are not NBFC. We are a housing finance company. But if you see the guidelines, they are pretty much in line with what is applicable to us in any case. Capital adequacy of 12% is what we have, risk weight is the same, provisioning and non-performance accruals are in line with banks.
Q: So you all are also in the 90 days default norm, right?
A: Yes, we have always been. We have always been for the last about seven-eight years.
Q: So, life doesn’t change, even if the NHB were to adopt any of these right?
A: No. I don’t think anything changes.
Q: As a veteran watcher of the NBFC space, where do you think the pain will come?
A: I think in the 90 days.
EQUITY BULL
RAJESH DESAI
HDFC eyes 20% loan growth ahead, says Keki Mistry
HDFC , the nation’s largest housing finance company, has launched a new fixed rate home loan scheme called as 'fixed first'. Home loan borrowers can avail loan at a fixed rate for the initial three or five years under the new scheme.
Keki Mistry, vice chairman and chief executive officer of HDFC told CNBC-TV18 that this product is for people, who do not want to take any risk on interest rates and want to freeze those rates.
“We believe that we should be looking at loan growth of around 20%,” added Mistry.
Below is the edited transcript of the interview. Also watch the accompanying video.
Q: What is the trigger for this new fixed floating product that you announced yesterday? Are you implying that you don’t see rates rising much from here on because you are giving a five year fixed product?
A: No. There are a large number of people who come to us and say that they are worried about interest rates going higher and hence, they want to fix their liabilities. So for those kind of people, who do not want to take any risk on interest rates and want to freeze those rates, this product has been introduced.
It is in addition to the normal floating rate loan product. So, you have a choice of either taking a floating rate loan product if you believe rates have peaked. If you believe that rates are going to remain high, then you can take a three-year to five-year fixed product, the choice is yours.
Q: The RBI still defines a teaser loan as one that is fixed first and floats thereafter, so have you checked with them about provisioning?
A: We have spoken informally to the National Housing Bank. Teaser loan is a product, where in the initial period, the interest rate is lower and by offering a lower interest rate, a person gets attracted to the loan and takes it.
In our product that is not the case, if you see the fixed rate
product barring one slab, in every other slab, the interest rate is a
little higher in the fixed portion in the first three years than what it
is in these floating products. So, this is clearly not a teaser rate at
all.
Q: There are so many concerns with respect to global and domestic growth. Will you have to scale down your loan growth forecast?
HDFC launches fixed rate home loan scheme, others to follow
Largest housing finance company HDFC on Monday launched a new fixed rate home loan scheme christened as 'fixed first'. This product is on similar lines with ICICI Bank 's home loan product, launched three weeks back, that had offered the benefits of repaying loan in the first one to two years at fixed rates in the range of 10.50-11.75% depending on loan amount.
Home loan borrowers can avail loan at a fixed rate for the initial three or five years under the new scheme. Thereafter, the loan will switch automatically to HDFC’s adjustable rate home loan (ARHL) product, which is an existing floating rate scheme.
The new scheme rates:
Loan Amount
(Rs in Lakh)
3 Year Rate of Interest (%)
5 Year Rate of Interest (%)
Up to 30
10.75
11.25
30.01 – 75
11.25
11.50
Over 75
11.75
11.75
“This option is in addition to all the existing home loan options being offered by HDFC. This option is for customers seeking to lock in their home loan interest rates and not take risk on interest rates moving up in the initial years,” said a release issued by the mortgage lender.
Meanwhile, two consecutive launches of fresh home loan products have prompted other industry players to join the bandwagan.
“We will certainly review our product lines. Our Advantage – 5 was a super hit scheme. But we had to discontinue it complying with the regulator. The scheme was of teaser nature,” V K Sharma, chief executive, LIC Housing Finance told Moneycontrol.com.
Advantage 5 had offered fixed rate of interest at 9.25% for 5 years and thereafter on floating basis.
HDFC's new scheme rates are higher than the existing rates offered by ARHL. The current floating rates are as follows: for loans up to 30 lakh is 10.75%, for loans Rs 30 - 75 lakh it is 11% and for loans above Rs 75 lakh it is 11.50 %. All are based on the current retail prime lending rate (RPLR). HDFC's RPLR is at 16.50%.
Interestingly, HDFC's new scheme gives some discount as compared to its existing fixed rate scheme that offers rates in the range of 12.25-12.75% to be frozen for next 20 years.
"RBI might take a call on all these fixed rate schemes. It is teaser rate only in disguise. Some lenders are offering it to customers very tactfully," said a top executive from an institution, engaged into lending business.
Customers can apply for HDFC's new scheme before October 31 and avail of the first disbursement on or before November 30, 2011.
According to a market consensus, the Reserve Bank of India has almost reached the end of rate hike cycle. In next one or two quarters, it might start slashing rates gradually. Following this, lenders too will have to pass on the benefit to their customers.
Sensing this, most of the lenders now want to fix current high rates for longer terms. Hence, they are keen on bring such fixed rate products, said market watchers.
Saikat Das
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EQUITY BULL
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EQUITY BULL
RAJESH DESAI
RAJESH DESAI
Foreclosure to be free on floating rate home loans
September 07, 2011
The Reserve Bank of India has asked banks not to impose foreclosure charges on floating rate home loans as it would transfer only interest risk to the borrower and not the credit risk. Banks can, however, impose foreclosure charges on fixed rate home loans.“Banks may address their asset liability mismatch issues by recourse to the interest rate swaps market. Floating rate loans pass on interest rate risk from banks, which are much better placed to manage it, to borrowers, and thus banks only substitute interest rate risk with potential credit risk,” the RBI said in a release.
The central bank said, along with the Indian Banks' Association (IBA), it would examine issues of mental harassment of bank customers and monetary compensation for customers with special grievances.
“Issues that may receive attention in the analysis would be: Whether only actual loss should be considered for compensation; whether mental harassment issues can be codified for compensation and whether compensation should be capped,” the release said.
The RBI would also determine whether policies of bank boards on compensation should include mental harassment as a ground for compensation.
These decisions were taken at the annual conference of banking ombudsmen held at central bank headquarters in Mumbai on Monday, which was inaugurated by RBI governor D Subbarao.
A senior official who attended the conference said, “Banks will eventually have to implement these directives of the RBI. The issue of compensation for mental harassment came up as a bank customer was demanding Rs 4 crore compensation from a mid-sized bank in a dispute over Rs 10,000.”
Subbarao said, “Rendering good customer service is like prevention and is better than the cure, which is various grievances redressal mechanisms.”
Ombudsmen will annually share information on complaints received and resolved with the local media
EQUITY BULL
RAJESH DESAI
Complete waiver of all prepayment charges not advisable: Parekh
HDFC chairman Deepak Parekh today expressed concerns over the current regulatory opinion of removing pre-payment charges on home loans, saying the move would create problems for lenders. The Reserve Bank of India’s banking ombudsmen, at a recent conference, had suggested that banks need not impose any charges for prepaying home loans when taken under floating rates, irrespective of the source of funds.
Parekh, speaking at the CAFRAL-NHB Roundtable on Housing Finance, portended that “serious problems may arise if there is a complete waiver of all prepayment charges”.
“If our lenders are charging us pre-payment charges, why are we not allowed to charge pre-payment charges?...I don’t think it is a good sign,” he said.
He, however, was in agreement over no charges being levied on prepayments from one’s own sources: “As long as prepayments are done from a customer’s own resources, there should be no prepayment penalty levied (as is currently stipulated by NHB)”.
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EQUITY BULL
RAJESH DESAI
In a press conference, vice-chairman and CEO of HDFC, Keki Mistry said net interest margin in Q2 was 4.3%
Loan book growth was at 25% and disbursements growth stood at 19%.
Capital adequacy ratio in the July-September quarter was at 13.8% and spreads stood at 2.8% in same quarter.
"There is no impact on asset quality due to rising interest rates," he said.
Housing finance company HDFC has reported a rise of 20% YoY in net profit of Rs 971 crore for the quarter ended September 2011. The company had posted net profit of Rs 807.5 crore in same quarter the previous year.
Total income shot up 37% to Rs 4,077 crore from 2,970 crore year-on-year.
RESULTS are attached.
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CA. Rajesh Desai
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CA. Rajesh Desai
RAJESH DESAI
RAJESH DESAI
Housing Development Finance Corporation (HDFC) never surprises. Even if it does, the surprise is limited to a narrow band of possibilities. And this narrow band is roughly defined as 20-24 percent growth in net profits every quarter (See Table).
Over the last five years, the company’s net profits have grown at the compounded annual rate of 18.5 percent and its share prices (adjusted for stock splits and bonuses) have compounded at nearly 17 percent. If you take the arithmetic average of quarterly earnings growth percentages over the last 25 quarters, including the latest – the figure is 24.6 percent.
If you are an investor with a heart condition who cannot take earnings shocks, HDFC is for you.
The second quarter (Q2) of 2011-12 is a case in point. The (mild) surprise is that this time the company has hit the bottom end of its profit growth band. Net profits showed up at 20.3 percent in the quarter to 30 September 2011 year-on-year. This means it must have been tough.
If you look at the numbers closely, there’s a story in it. The topline is growing slower than costs. While income from operations went up 40 percent from Rs 2,906.55 crore in Q2 of 2010-11 to Rs 4,077 crore this year, costs grew by 54 percent – from Rs 1,836.68 crore to Rs 2,831.44 crore.
The reason: interest costs, which are rising even faster than overall costs. In the September quarter, year-on-year growth in interest costs was nearly 57 percent.
HDFC has posted a net profit of Rs 971 crore, up from Rs 807.54 crore a year ago. The figure was above analyst expectations because analysts had assumed the worst, given rising interest costs.
But the analysts were both right and wrong. They expected a profit figure of Rs 945 crore when HDFC manufactured Rs 971 crore – thanks to an additional profit of Rs 28 crore on the sale of investments this year (Rs 87 crore versus Rs 59 crore in 2010-11).
At a press conference, HDFC Vice-Chairman and CEO Keki Mistry said growth in the loan book for the year ending March 2012 would be about 20 percent. For the quarter ending September, the growth was about 25 percent. The loan book as on 30 September was Rs 1,26,992 crore.
Despite the economic slowdown and high interest rates, the mortgage institution said it was not facing any asset quality issues.
In terms of profitability metrics, Mistry said HDFC’s net interest margin – the difference between interest paid and received after taking into account other operational expenses – was 4.3 percent for the quarter.
Gross spreads – the difference between interest paid and interest received during the quarter – was 2.28 percent.
An initial public offer for insurance subsidiary HDFC Life is slated for 2013, Mistry added.
Markets were unmoved by the results: the stock was up less than one percent at Rs 672.60.
Not surprising. Costs may rise, costs may fall. But HDFC delivers 20-24 percent every quarter.
For the results press release, click here.
Q&A: Keki Mistry, HDFCHDFC vice-chairman and chief executive officer Keki Mistry discusses second-quarter earnings with Manojit Saha and says the Reserve Bank of India may increase interest rates for the last time before it takes a pause.
What was the main driver for the profit growth in the July-September quarter?
The growth in profit is attributed to both loan growth and maintenance of spreads. The spreads for the six-month period stood at 2.29 per cent, which is a little lower than June numbers. But it is still in the ballpark number we talked about, which is between 2.2 per cent and 2.3 per cent. In the last financial year, the spread for the first six months was 2.32-2.33 per cent. One more factor which helped was the quantum of loan which we sold, for which we get income, that amount keeps increasing every year.What was the loan growth excluding the loans sold?
Excluding the loans sold, loan growth was 19 per cent, as on end September.The high interest rate seems to have not dented loan growth…
We are generally lending to middle-income groups. Our average loan size is Rs 19 lakh. People who buy the house for their own need will buy the house.With the rise in interest rates, the high value loan market will be impacted the most.
The provisioning has increased in the quarter…
Provisioning has happened in accordance with the change in norms. For example, there was no provisioning requirement on standard assets. But we, as a matter of prudence, were always providing 0.10 per cent on standard assets. Now, the National Housing Bank (NHB) says housing finance companies have to provide 0.4 per cent. So, we are also providing 0.4 per cent. Similarly, for substandard assets the earlier mandate was to provide 10 per cent but we were providing 15 per cent. As NHB increases the mandate, we are providing 20 per cent on sub-standard assets. In every bucket we are providing a little more than what is required by regulations.We have drawn Rs 255 crore, net of deferred tax, from the additional reserve created under Section 29C of the NHB Act. The rest is the regular provisioning which comes from the profit and loss account.
Do you have to make higher provisioning for the fixed-cum-floating loan rate scheme launched in September?
We don’t think we need to make higher provisioning for those loans for the simple reason that the definition of the teaser loan rate does not apply because the fixed rate component is a higher rate than the floating rate loan.What kind of response you have seen on this scheme?
It is still early days. About 10-15 per cent of the approvals fall in the category.The capital adequacy ratio is at 13.8 per cent, higher than the regulatory requirement of 12 per cent. Do you have plans to raise capital?
We are comfortable with the level of capital to support our growth and have no immediate plans to raise capital.When are you planning to list the life insurance arm?
Nothing will happen in the current financial year. We will take a fresh look in the next financial year.What is your expectation from RBI’s policy review scheduled on October 25?
My personal expectation is that RBI will increase rate by 25 basis points. I think it will be the last increase.
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CA. Rajesh Desai
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CA. Rajesh Desai
RAJESH DESAI
reports attached.
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CA. Rajesh Desai
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CA. Rajesh Desai
RAJESH DESAI
RAJESH DESAI
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CA. Rajesh Desai
RAJESH DESAI
KRChoksey is bullish on Housing Development Finance Corporation (HDFC) and has recommended buy rating on the stock with a target of Rs 785 in its October 18, 2011 research report.
“HDFC posted 20.2% y-o-y and 14.8% q-o-q growth in reported earnings to Rs 971 crore, in line with our estimate of Rs974 crore and marginal above street expectation. Net interest income grew by 14.1% y-o-y to Rs 1,164 crore, led by healthy loan (including loan sold) growth 24.2% y-o-y. Ex-treasury gains, earnings grew by 18.6% y-o-y & 8.9% q-o-q to Rs 908 crore. The loan book (excl. sold loans) expanded by 19.5% while after adjusting for sell- downs it grew by 24.2% y-o-y. On YTD basis, Approvals and disbursements growth were 18% y-o-y and 19% yo- y respectively showing moderation in loan demand owing to rising interest rate environment and higher real estate prices.”
“NII grew 14.1% y-o-y & 16.6% q-o-q to Rs 1,164 crore lower than our estimates. The deviation was primarily attributed to lower-than expected asset re-pricing and lower surplus from mutual funds. The reported spread pegged at 2.29% flat on q-o-q basis. Loan book incl. sell- downs grew by 24.2% y-o-y to Rs 1, 31,981crore. We believe HDFC continues to maintain spread in the range of 2.2% -2.3%, going forward. We model in 22.7% CAGR in loan book over FY11-13 driven by retail and wholesale business. Trading gains positively surprised to Rs87 crore vs Rs16 crore in Q1FY12 despite of adverse market condition in financial markets both fixed income and equity reflecting superior fund management capabilities. Unrealized gains was down (-8% q-o-q) to Rs 21,336 crore. Loan book adjusting for sell downs grew by 24.2% y-o-y to Rs 1,31,981 crore while growth excl. sold loans pegged at 19.5% y-o-y to Rs 1,26,992 crore. Developer loans accelerated while individual loans slowed down as reflected in change in the incremental loan mix- developer loan mix increased by 235bps q-o-q to 42% on incremental basis. Retail loans stood at 63% of the loan book in Q2FY11.”
“HDFC has delivered another consistent performance on most of the operating parameters during the quarter. Business growth continued to be in line with management’s guidance while asset quality remains best in class. Steady NII growth, higher-than expected trading gains and stable spreads were key highlights from the result. We expect 20.6% CAGR in core earnings on the back of strong loan growth, stable margin and lower credit cost. Market leadership in housing finance sector, superior underwriting standards, stable spreads, well diversified borrowing profile, quality of earnings and unlocking value of subsidiaries are key value drivers for the stock. At Rs 673, the stock is trading at 4.7x FY13 core book value and 12.6x FY13 core earnings. RoA and RoE continue to remain at superior levels ~ 2.8% and 23.9% respectively in FY13.”
“We have tweaked our earnings estimate downward by 1.3% and 4% for FY12 & FY13 respectively factoring lower loan growth and steady spreads. The stock has outperformed the market by 5.8% in last three months reflecting resilient earning performance in tough macro environment. We believe interest rates are at peak level and reversal in interest rate cycle would benefit wholesale funded entities such as HDFC and re-rate valuation multiple going forward. Hence, we reiterate our positive outlook and BUY rating on the stock with revised target price of Rs 785 (Potential upside 16.7%),” says KRChoksey research report.
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CA. Rajesh Desai
RAJESH DESAI
Q: Investor has 100 shares of HDFC at Rs 668. What's your call on HDFC?
A: I think this is one of the best stocks to hold. It has had one of the most robust results in the current environment. We saw the company’s loan growth rising, disbursements rising, we are also seeing that the company is going to maintain its ROE for the next three-four years… for FY11 to FY14, the ROE would be above 20%. So my take is that this stock is wonderful to hold and has one of the best asset qualities in class for this stock. You can hold this stock and can expect a target of around Rs 835 in the next one year.
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CA. Rajesh Desai
RAJESH DESAI
NBFC: Housing Finance sector updateReport attached. |
CA. Rajesh Desai
RAJESH DESAI
Sent: Monday, October 24, 2011 10:51 PM
Subject: Banking - Key takeaways: Conference call with CMD of NHB; sector update
CA. Rajesh Desai
RAJESH DESAI
SP Tulsian, sptulsian.com selected HDFC Warrants as multibagger stock picks for the day. He sees these stocks having the potential to fetch better returns ahead.
Below is the edited transcript of Tulsian’s interview with Udayan Mukhrejee and Mitali Mukherjee of CNBC-TV18. Also watch the accompanying videos.
On HDFC Warrants
This is a very interesting story. I have been taking positive view on HDFC and the relative performance of this warrant will be better. HDFC Bank issued warrants 26 months back at Rs 55 per share to all the existing shareholders of the company. On August 23, 2012 one warrant will give an entitlement to each warrant holder to go for share subscription of HDFC at Rs 600 per share.
The warrant is currently ruling at Rs 105 with that the effective cost works out to Rs 705. Even if we take a dividend loss of about Rs 10 expecting that 500% dividend will be get declared, after adding that the effective cost works out to about Rs 715.
We are paying a premium of about Rs 35-40 and in lieu of that one is having funding facility or savings of about Rs 560. Alternatively, if I have bought HDFC share and would have kept it for one year, I would have invested Rs 670 and that much amount would have blocked. The effective interest cost to me works out at about 8% p.a. which looks very interesting.
I am expecting HDFC to move to Rs 770-775 by August 2012. Taking the differentials, at that point of time warrant holders entitled to subscribe one share at Rs 600. If share rules at that point of time is at Rs 770 it will have a difference of about Rs 170-175 per warrant which is now ruling at Rs 105. So this effectively can give 60% return on the amount invested now.
I don’t think that kind of return is expected from HDFC. If I buy a share at Rs 665-670 that will rise to about Rs 770 and give me a return of about 16-17-18%. But by opting for warrants I can have a return of 55-60%. I don’t think that there is any kind of downside risk. It might be hardly 10%.
The only problem for the small investors is that these warrants are available in the demat mode but one has to buy a minimum lot of 1,850. But the share vis-à-vis the warrant cost ratio works out to 6:1. Those who are looking to buy 250 shares can very well opt for these kinds of instruments. I am quite positive about it. It is likely to give a return of at least 60% in the next one year or 10 months.
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CA. Rajesh Desai
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CA. Rajesh Desai
RAJESH DESAI
RAJESH DESAI
HDFC Realty in talks to raise $600 million
HDFC Realty, the private equity arm of Housing Development Finance Corporation, is engaged in talks with the world’s largest sovereign funds to raise its fourth real estate fund. HDFC Venture Capital Ltd (HVCL), fund manager to HDFC Property Fund, will start raising its new offshore fund, with a corpus of $400-600 million, by the end of November, Business Standard reported, citing sources--
CA. Rajesh Desai
RAJESH DESAI
Shareholding pattern is atch.
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CA. Rajesh Desai
RAJESH DESAI
HDFC is the holding HDFC MF shares.
The mutual fund industry took a hit of more than Rs 16,000 crore on its asset size during 2011, even as the newly-crowned market leader HDFC MF grew in size and consolidated its top position.
As per the latest quarterly data released by Association of Mutual Funds in India (AMFI), the cumulative average Asset Under Management (AUM) of all fund houses stood at about Rs 6,87,640 crore in the last quarter of 2011.
This marked a decline of Rs 16,040 crore from a total of Rs 7,03,680 crore in the first quarter or January-March period of 2011.
The experts attributed the fall to the sharp losses in the stock markets, as also to the withdrawals by investors. The funds typically collect money from investors to invest in various asset classes including stocks and debt securities.
The loss was even larger for the cumulative asset base of the top five fund houses (HDFC, Reliance, ICICI Pru, Birla Sunlife and UTI Mutual Funds), as their total average AUM declined by Rs 31,741 crore in the same period to end the year at Rs 3,60,733.14 crore.
At the end of 2011, HDFC Mutual Fund retained its leadership position with total average AUM of Rs 88,737.07 crore. It marked an increase of Rs 2,455 crore from the levels in the first quarter of 2011.
HDFC MF was the only one among top five fund houses to register an increase in this period, as the remaining four saw their AUMs decline.
Reliance MF's average AUM dipped by Rs 17,417 crore to Rs 84300.35 crore, while that of ICICI Prudential MF dipped by Rs 4,080 crore to Rs 69472.08 crore.
Birla Sunlife MF's average AUM dipped by Rs 3,327 crore to Rs 60406.30 crore, while the decline was larger at Rs 9,371 core for UTI MF, whose average AUM stood at Rs 57817.34 crore in the October-December quarter of 2011.
At the end of 2011, there were a total of 44 fund houses in the country, as against 42 in the first quarter.
Source: http://www.expressindia.com/latest-news/Mutual-funds-lose-Rs-16-000-cr-in-2011/895740/
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CA. Rajesh Desai
RAJESH DESAI
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CA. Rajesh Desai
RAJESH DESAI
Sector Update - Housing Finance Companies
REPORT ATCD.--
CA. Rajesh Desai
RAJESH DESAI
Middle income customers to help HDFC get 18-20% growth
The Reserve Bank of India’s credit policy meet on January 24 is largely touted to cut interest rates by 25 basis points. The apex bank has raised interest rates 13 times since March 2010 in its bid to control headline inflation that has been unwavering above 9% for a year.
Mortgage lender HDFC ’s vice chairman & CEO Keki Mistry understands that people are worried about high interest rates and its impact on home loan borrowers. Even though people believe that because of high interest rates there will be a significant slowdown in housing, he hasn’t seen that.
“The primary reason why we haven’t seen that is because we cater to middle income customers,” says Mistry.
He concedes that a few big cities are seeing a slowdown but for them growth remains strong. “Middle income people are still not impacted, jobs are intact, business sentiment may be weak but at the grassroots level one hasn’t seen a slowdown,” he adds.
Irrespective of domestic growth concerns put forward by other lenders, Mistry is confident they won’t have to scale down their loan growth forecast. “I have always talked of growth of between 18-20% and we are reasonably confident that we will get 18-20% growth in a year.”
In an interview to CNBC-TV18, Sudarshan Sukhani, s2analytics.comQ: One heavyweight that you are buying is HDFC ?
A: HDFC is a stock that you should always buy whenever the opportunity arises. It’s not a stock that you want to go and short sell. It’s the easiest index stock to be pulled up because it also comes with a lot of quality. Now what happened was HDFC went through a very sharp rally from Rs 600 to Rs 680, almost 15%. Then it went through a very shallow correction.
That correction seems to be over since it has been gaining for the last two days now. It’s on the verge of a breakout again but whether the breakout happens or not, the stock is a buy. You have a large rally and a shallow correction and it’s in all fairness a resumption of the uptrend. So, yesterday’s gain should be built upon.
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CA. Rajesh Desai
RAJESH DESAI
Carlyle owns over 3% post sale of 2cr shares: HDFC
In an exclusive interview to CNBC-TV18, vice chairman and chief executive of HDFC , Keki Mistry, confirms that it is indeed Carlyle Group that was in the market to sell shares. "They have sold 2 crore shares out of the 7 crore they own, so they continue to remain invested with over 3% stake" he said.
Private equity firm Carlyle has been invested in HDFC since 2007, so Mistry believes that the sold the shares to take some profits. He goes on to say that it is unlikely that they will be in the market to sell the rest of their stake.
Talking about the buyers, Mistry says that the shares sold have been mopped up by domestic and foreign buyers, all who are long only investors.
Below is an edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.
Q: With this block deal, could you confirm whether Carlyle indeed is the seller and what their remaining stake now stands at in HDFC?
A: We don't have the shares lodge with us confirming the thing directly, but yes from what we hear it is Carlyle who sold. They have sold 2 crore shares out of the 7 crore shares that they own. At the end of the day, they are private equity investors; we had a great relationship with them, but the money that they invested in HDFC is money which has to be returned back to investors after some period. They had invested in HDFC in 2007, so I guess that they taken some profit.
Q: Any communication that you have had with Carlyle which suggests that they might be looking to sell all the 7 crore shares in phases?
A: No, not to my knowledge. In fact, when I spoke to them, I understand that they have an internal rule or an internal policy that if they sold shares of a company they would not deal in those shares for a certain period of time. I don't know exactly what that period is, but its three or four months or something like that.
Q: So investors should not perceive that this will be an overhang on the HDFC stock?
A: I don't think so. If they wanted to, they would have sold the whole lot now. From what I understand from market, there was a reasonably good demand for the shares.
Q: While you may not be able to divulge the details of the exact buyer, can you give us a sense of whether the block has been transferred in one chunk or whether it's been a clutch of buyers that have picked up the 2 crore shares?
A: It would be clutch of buyers. Some would be domestic, many would be foreign and mostly would be long only investors.
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CA. Rajesh Desai
RAJESH DESAI
Why your home loan just got a little more expensive
No, interest rates have not been hiked (thank God for that!).
But a recent notification from the Reserve Bank of India directs banks to exclude stamp duty, registration and other documentation charges while calculating the value of a property could lead to borrowers shelling out more in terms of their own funds.
Buyers of homes in the Rs 20-70 lakh bracket will get hit further. Reuters
According to the RBI, several banks had been adopting different practices to calculate property values while sanctioning home loans. Some of them included the cost of stamp duty, registration and other documentation charges in their property value assessment, it noted.
“This overstates the realisable value of the property as stamp duty, registration and other documentation charges are not realisable and consequently the margin stipulated gets diluted,” the notification said. “Accordingly, banks should not include these charges in the cost of the housing property they finance so that the effectiveness of LTV (loan-to-value) norms is not diluted.”
Current regulations permit banks to lend up to 80 percent of a home loan above Rs 20 lakh and up to 90 percent for loans below Rs 20 lakh.
If the above-mentioned charges are excluded, property values will be estimated lower by banks. That will reduce the amount of loans that borrowers can get — and increases the cost of buying property.
“I think buyers of homes in the Rs 20-70 lakh bracket will get hit further and sales in this segment could fall by a further 5-10 percent,” Sanjay Dutt, chief executive, real estate consultancy Jones Lang LaSalle, told Business Standard.
It will be another blow to the real estate industry, already suffering from falling consumer demand. For home buyers also, the new regulation will add to costs even as borrowing costs and property prices remain high.
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CA. Rajesh Desai
RAJESH DESAI
Citi to sell stake in HDFC for up to $2.1 bln: sources
(Reuters) - Citigroup Inc(C.N) plans to raise up to $2.1 billion by selling its entire stake in Housing Development Finance Corp (HDFC), three source with direct knowledge of the deal told Reuters on Thursday.
Citigroup has launched the process to sell about 145 million shares, or a 9.9 percent stake, in India's top mortgage lender for between 630 rupees and 703.55 rupees per share, said the sources, declining to be named as the deal is not public yet.
HDFC stock ended down 0.1 percent ahead of the news at 701.30 rupees.
A spokesman for Citigroup in India declined to comment, while an HDFC spokesman could not immediately be reached.
(Reporting by Sumeet Chatterjee and Indulal P.M.; additional reporting by Elzio Barreto in HONG KONG; Editing by Aradhana Aravindan)
With property prices and interest rates rising with each passing year, the government is reportedly considering raising the tax exemption on interest paid on housing loans to up to Rs 3 lakh annually from the existing limit of Rs 1.5 lakh in the coming budget, which is scheduled to be tabled in Parliament on 16 March.--Warm Regards,Uttam
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CA. Rajesh Desai
RAJESH DESAI
HDFC block deal: Most shares picked up by FII, says Mistry
Shares in India's top mortgage lender Housing Development Finance Corp ( HDFC ) were traded in block deals early on Friday, stock exchange data showed, with the stock falling as much as 6%.
Citigroup Inc has raised USD 1.95 billion by selling its entire stake in Housing Development Finance Corp at Rs 657.50 a share.
Its offer to sell its entire HDFC stake received bids for more than twice the number of shares. About 145 million shares changed hands on the exchanges, data showed.
Confirming the news, Keki Mistry of HDFC said the existing investors and long only funds participated in this deal. "Most of the shares were picked up by foreign investors," he said adding, "Citi may have sold to shore up capital."
Citigroup had plans to raise up to USD 2.1 billion by selling its entire stake in HDFC as part of the US bank's efforts to shore up its capital base.
Sources say most bids for the HDFC shares have come at around Rs 645 apiece, compared with its Thursday's close price of Rs 701.30.
The transaction is the largest share sale this year in India and comes close on the heels of investors such as Carlyle paring their stakes in Indian companies after a surge in share prices in 2012.
Below is an edited transcript of Mistry's exclusive interview on CNBC-TV18. Also watch the attached video.
Q: Could you confirm whether or not Citi has indeed sold its entire stake and what price the deal has gotten done at?
A: I cannot confirm anything because no details have come to me as yet but from the market sources we know that the deal has been completed. It has got a very good response and according to market sources the demand was about 2-2.5 times.
Q: Any details on where this appetite has come from and whether the existing investors as well have chosen to uptake stake or exposure?
A: I understand it's a mix of existing and new investors - foreign institutional investors and large long only investors. So I don't think they were hedge funds. They are large institutional investors.
Q: What will the FII holding be post this deal getting done?
A: It may not go up much because the total foreign holding as we see it, which includes Citi, stood at about 74%. Now, with Citi getting out and most of the shares being taken up by foreign institutional investors, it broadly remains the same. It may marginally come down to the extent of domestic demand that there may have been on the issue.
Q: Was this intent communicated to HDFC well in advance and what was the main reason for the exit of the stake?
A: I don't think there was any intent or specific mention that they were going to sell. The fact is, as we are reading in the newspapers, that Citi needs to shore up their capital. That is something, which everyone has been talking about. Therefore, there has been a bit of overhang on the stock.
The good part is that when Citi finally decided to sell and they spoke to us yesterday. It's a good thing that they sold the whole block completely rather than left something behind because that would have then created an unnecessary overhang.
They have also left fair bit of money on the table for the new investors to make money. I am thankful to them for that.
(With inputs from Reuters)
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CA. Rajesh Desai
RAJESH DESAI
1) Citigroup Inc. sold its 9.85% stake in HDFC. A total of 145.3 million shares were sold.
2) The average price for one share was Rs 657.56.
3) Citi will get $1.9 billion from the transaction at the current exchange rate, resulting in a pre-tax gain of $1.1 billion (Rs 5,490 crore), and an after-tax gain of approximately $722 million (Rs 3,550 crore).
4) Citi had earlier sold 1.6% stake in HDFC in June 2011.
5) Citi sold its stake because it needed additional capital under Basel 3 norms. Basel 3 is a global regulatory standard on bank capital adequacy, stress testing and market liquidity risk. It was developed in response to the deficiencies in financial regulation revealed by the late-2000s financial crisis.
6) Other foreign banks like HSBC and Goldman have also been exiting assets not seen as "core". Citi's investment in HDFC was largely financial and the ability to convert HDFC investment to a strategic investment was limited.
7) The book was oversubscribed 2-2.5 times indicating the strong demand for HDFC, which is India's top mortgage lender.
8) Foreign investors like Aberdeen Asset, Capital International, Fidelity, JPMorgan, Ontario VC Fund and Temasek bought shares from Citi. Domestic investors like ICICI Prudential also bought shares.
9) "Citi selling its stake has nothing to do with the company. The capital requirement of American banks has been increased and because Citi needs to shore up their capital, they have sold their stake. The good thing is the entire stake has been sold in one go, so there is no overhang and the other good thing is the demand for such a large issue was high," Keki Mistry, Vice Chairman & MD of HDFC
10) "We are pleased with the results of our investment in HDFC and will continue to value our long-standing relationship with the company. Citi remains deeply committed to India and we continue to focus on growth opportunities for our franchise in this very important market,” said Pramit Jhaveri, Chief Executive Officer of Citi India.
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CA. Rajesh Desai
RAJESH DESAI
Fortune Interfinance (FIFL) is bullish on Housing Development Finance Corporation (HDFC) and has recommended buy rating on the stock with a target price of Rs 750 in its February 22, 2012 research report.
"HDFC's Q2FY12 PAT was in line with our estimates. Reported PAT growth of 10% YoY was lower than the historic trend of ~20% YoY growth, mainly due to one-off investment gain booked in Q3FY11, adjusted for which PAT growth was ~20% YoY. Q3FY12 was another steady quarter, with stable asset quality, robust credit growth and funding flexibility aiding margins. HDFC offers stable growth with low asset quality risks. Despite higher exposure to vulnerable segment of corporate loans, HDFC has operated on a stable asset quality. Following NHB requirement towards higher provisioning norms on loan portfolio including teaser loan book, HDFC carries a cumulative provision of Rs15.8bn (1.2% of total loans) on balance sheet. The teaser loan portfolio provision stands at Rs4.5bn which will reverse in Q1FY13. However, given tightened regulatory requirement we have raised our provisioning cost to 6bps of average assets over FY12-13E."
"HDFC's reliance on bank funding has come off from a high of ~36.5% in March 2011 to <20% in just nine months, with bank's rate remaining higher than AAA corporate borrowing rates. This displays HDFC's ability to significantly change liability profile to maintain spreads. Overall spreads did contract in Q3FY12 v/s Q2FY12, mainly due to Rs1.0bn P&L charge relating to cross-currency swaps that required recognizing losses on FX exposure, without considering the interest rate differential. Stable growth: Loan book grew by ~21% YoY, with ~18-19% growth in overall approvals and disbursements was better than <15% YoY growth in banks mortgage book. Volumes have been low in Mumbai; however, management is seeing robust volumes from Tier-2 & 4 cities, aiding credit growth."
"HDFC has exhibited resilience given its ability to deliver a) strong loan growth b) stable asset quality and c) superior return ratios. Q3 results clearly shrugged-off concerns over any material slowdown in loan growth due to higher interest rates and elevated property prices. We at FIFL reiterate "Buy" on HDFC with a target price of Rs 750 .We have valued the stock at 25.86x FY13E and at current market price the stock is trading at 24.1 x FY13E EPS," says Fortune Interfinance research report.
I
Citigroup sold stakes in HDFC to shore up capital base: Keki Mistry, HDFCIn an interview with ET Now, Keki Mistry , VC & CEO,HDFC , gives his views on the Citigroup plan to sell its entire stake in HDFC and shares his outlook for the housing market. Excerpts:
ET Now: I want to start off with the fact that how a large portion of an Indian financial institution deal has been cleared and has been subscribed too so convincingly. It just shows the kind of appetite that is there for some of the large marky Indian financial companies.
Keki Mistry: I absolutely agree with you. From what I hear from market sources, the demand for the issue was 2 to 2.5 times. If you look at 2-2.5 times in a deal size as big as this, we are talking of a sum of over Rs 20,000 crore. So, there is a massive demand which clearly reflects the fact that foreign institutional investors are looking at Indian financials in a big way.
ET Now: Now that this exit has happened, which of your other institutional investors, if you will if you have just had a chance to probably look at what is there right now, still continue to remain amongst the large holders and do they continue to do that? You would have probably had conversations with them too?
Keki Mistry: We have a list of our large institutional shareholders which is there on our website. So, apart from Citi and Carlyle, the other big groups and these are foreign institutional investors, long term players, not hedge funds, would be people like Aberdeen, JPMorgan Asset Management, so asset management side,Capital Group and so on so forth.
So, these are our large foreign institutional investors and even on this deal, we understand that the demand has been largely from long only foreign institutional investors with a small piece being taken by local investors. Now, who the investors specifically are, at this moment I do not know, but as soon as we get the name in our registry, we will be happy to share you names.
ET Now: But give us a sense on how much holding are you comfortable keeping with large institutional investors at this point, primarily because now Citi has exited HDFC?
Keki Mistry : We are extremely comfortable with foreign institutional investors. They have been shareholders of HDFC for a very very long period of time and groups like Capital and Aberdeen and JPMorgan and many others, why name only 3, many others have been shareholders of HDFC for years and years and these are long only investors. These are not private equity investors. Now, Carlyle is a private equity investor. Private equity investors essentially have a limited time span within which they have to return the money back to investors.
As far as Citi is concerned, there was always a little bit of an overhang which was there in the market because once the US government, US FED has continuously been shoring up the capital requirements for American banks, because of that the people have been worried about the fact that Citi at some point of time to sell. So, the good part is if I may say that the entire block, the entire 9.5% has been solely one block in one deal. So there is no overhang that is left now on the stock.ET Now: But are you not at all concerned by the exit of Carlyle and Citi?
Keki Mistry: No, why should we be concerned with it, the fact that they have been bought by large institutional investors. We have been very happy with Citi as shareholders, but at the end of the day, there was always that overhang that was there that some point of time Citi would need to sell shares to shore up their own capital requirements.
It is nothing to do with the company. It is no reflection on the performance of the company and Citi I am sure will gladly explain. But it is the fact that Citi itself was having to shore up its capital and therefore that overhang was always there in the market.
ET Now: Are these new investors who you are talking to at this point comfortable with the valuations and the pricing that perhaps would be on offer to buy shares?
Keki Mistry: I am sure they are, otherwise they would not have subscribed and also the good part is that Citi has left a little bit of money on the table for the investors, which is always a very nice thing to do. And when you are doing a block if this size, $2 billion, that is a very very large block, you have to leave a little bit of money and I am glad they have left that money on the table. So, like Citi has made handsome return on their investment in HDFC, I am sure the new investors also will.
ET Now: One word really and this is coming by virtue of the fact that the conversations that we have had with a few large real estate companies and one more to follow today as well have now been speaking about how the last couple of months, there has been a sudden resurgence of buyers per se for the mid-income housing as well as in some cases even premium housing. Are you sensing that in business and do you believe that the next 6 months, if not the next 12 months would probably be substantially better than how the last 12 months have been?
Keki Mistry: People talk about this, the last 12 months, but to be honest, you have seen our results for the first 9 months of the financial year. We had seen a 25% growth in the loan book. We note that the slowdown if any in that first 9 months was primarily large cities.
You look at Mumbai, Mumbai in particular, Mumbai has seen a slowdown, but one of the reasons Mumbai has seen a slowdown is one, property prices indeed are very high, No 1. And No. 2, with high interest rates and with the tax benefits being defined in absolute rupee terms, the actual effected cost of taking a large loan which is what you would need in a city like Mumbai is very high.Let me explain this. If you take a loan of say 1.9 million, which is the average loan size, 19 lakhs, and if the interest rate on the loan is let's say 11%, then on a post tax basis, your actual effective cost of taking the loan is less than 7% because there is a fiscal benefit, there is a tax deduction of interest, there is a tax deduction of principal, but a Rs 19 lakh loan is nothing in Mumbai.--
So, if you are buying a property in central Mumbai, your property price will be running into crores. So, therefore you need a much larger loan amount and for that large loan amount, the difference between the effective rate and the actual rate is very very insignificant because the tax benefits are in absolute rupee terms. And therefore the higher the loan amount, the less will be giving back to the tax benefits.
ET Now: Do you think the next 6 to 12 months would be better for the industry as a whole compared to what the last 12 months have been?
Keki Mistry: Demand for housing is largely a function of the level of confidence of an individual. Buying a house for your self occupation, you would want to buy a house which must be affordable, the property must be good, your family must like it and so on so forth. But the most important thing is that the individual who is buying a property and who is taking a loan for that property must be sure of his job.
So, if he feels that his job is shaky, then at a time like this people would not like to buy a house. So, as the economy stabilises, as things start looking better from an industry perspective, people start feeling more confident, that obviously creates a positive sentiment as far as housing is concerned.
CA Mihir Desai
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CA. Rajesh Desai
RAJESH DESAI
HDFC is the bluest of all the blue chip equities in the International markets but we Indians are not fond of HDFC as most of the market participants call it a Elephant or widow share. HDFC is a great compounder with excellent and transparent management. Even CITI was a unwilling seller but was forced to sell due to FED guidelines. It did not sell even in the great crisis of 2008. Good results of this co are celebrated with Champagne in New York, Frankfurt, London & Tokyo as we do not own HDFC in large quantities on account of lack of day trading opportunities over here. When SBI under Bhatt resorted to unfair competition it went into a shell and did not go for growth. Just have a look at its SOTP valuation in reports posted in this thread.
DISC. My family portfolio has 20% of HDFC shares hence my opinion may be biased.
Interesting comment ... From what I hear from market sources, the demand for the issue was 2 to 2.5 times. If you look at 2-2.5 times in a deal size as big as this, we are talking of a sum of over Rs 20,000 crore. So, there is a massive demand which clearly reflects the fact that foreign institutional investors are looking at Indian financials in a big way.#1. Deals like this do not happen on Thursday night. Wonder if the same people were running up HDFC to 720 when they knew CIti would settle for 650 or less !!#2. I read somewhere the FII flows in this cycle were about $ 4 billion and .. that pushed the market up by 1000 points. Now ... half of that goes away in one deal !! Yeah, it gets redistributed, but the effect is the same, isn't it?
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Regards,Harry
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CA. Rajesh Desai
RAJESH DESAI
Dual rate home loans: HDFC telling customers to use ‘conversion option'
Customers who have taken home loans under the dual rate scheme are facing a peculiar problem. From April 1, once their rates shift from fixed to floating, their floating rate will be higher than the current floating rates, due to higher spreads. HDFC Ltd is encouraging its borrowers to make use of the ‘conversion option' of switching over to the new floating rate. The regular conversion fee is 0.5 per cent of the outstanding amount and it is a one-time fee. However, given that a huge chunk of its borrowers are facing this problem, the company may offer a lower conversion fee this time.
Currently, HDFC's floating rates vary between 10.5 and 11 per cent, depending on the amount. For customers whose loans become floating from April 1, the rates could be in the 11.5-12 per cent range, due to higher spreads over the RPLR (retail prime lending rate).
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CA. Rajesh Desai
RAJESH DESAI
Shares are going in strong FII hands as per market info.--On Fri, Mar 30, 2012 at 11:20 AM, Mihir Desai <desaim...@gmail.com> wrote:
Huge delivery based buying in HDFC on 29.3.12 on NSE
Quantity Traded 1,34,18,664 Deliverable Quantity (gross across client level) 95,01,622 % of Deliverable Quantity to Traded Quantity 70.81 % --
CA Mihir Desai
Zarine Shroff
I am a Stag & neither a Bull or Bear.
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CA. Rajesh Desai
RAJESH DESAI
Results on 7.04.12
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CA. Rajesh Desai
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CA. Rajesh Desai
RAJESH DESAI
RAJESH DESAI
A Class Apart
Milind Barve was pulled out from HDFC Ltd - where he was in the treasury division - to join as Managing Director of HDFC Mutual Fund just four days after it came into existence in June 2000.
Today, Barve is one of only two CEOs in India - the other is IDFC MF's Naval Bir Kumar - who remains head of a fund house since its inception. What satisfies the media-shy Barve even more is the experience of building India's largest-fund house from scratch.
HDFC MF boasts the highest assets under management (AUM) of Rs 88,628 crore, with Reliance Mutual Fund closely following with Rs 82,305 crore.
IN VIDEOS: |
Stability at the top has certainly helped.
"My team has also been around for a fairly long time," says Barve. "Our stable and high performing team puts us on a better footing," adds Anil Bamboli, a fund manager with HDFC.
Bamboli, who has been adjudged the best debt fund manager in the BT-Value Research study, says the parentage of HDFC, the brand, its practices and investor focus have all contributed to HDFC MF's growth.
Ditto for due diligence while making investments in the market. Chirag Setalvad, who manages half a dozen HDFC schemes - one, HDFC Balanced, has topped the Hybrid: Conservative Growth category in this study - says that while valuing a company his team insists on meeting customers, suppliers, ex-employees, and carries out factory visits.
"At the end, we try to stick to our circle of understanding, focus on the purchase price and a margin of safety," says Setalvad.
"A bottom-up approach is the hallmark of HDFC MF," says Sanjeev Ahuja, a Delhi-based independent financial advisor and founder of SA Wealth Management. "They evaluate a stock and then decide to invest in it instead of buying stocks to chase a momentum."
This strategy has worked for the fund house. For example, HDFC Prudence, a balanced fund, has given 25.34 per cent returns over the past three years, against 13.06 per cent by the CRISIL Balanced Fund Index. Two of HDFC MF's biggest schemes - HDFC Equity and HDFC Top 200 - have amassed AUMs of Rs 10,000 crore each.
In 2003, HDFC MF surprised everyone by buying an equity fund house, Zurich India Mutual Fund. It was a prescient move. Zurich came with high-performing equity schemes just when the equity market was getting into a bull run - the BSE Sensex zoomed from 3,000 levels in 2003 to 21,000 points in early 2008.
"We also used the period of uncertainty post 2008 to consolidate our position by encouraging retail investors to make systematic investment plans," says Barve.
A year ago, Barve took up chairmanship of Association of Mutual Funds of India. "The penetration of mutual funds is very low in India despite large AUMs of the industry," he says. "We all need to work on it." It is a new orbit for the head of India's best fund house.
ADDITIONAL REPORTING BY SUMAN LAYAK
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CA. Rajesh Desai
RAJESH DESAI
Should you shift to lower home loan rates or switch lenders?
Thousands of State Bank of India's home loan customers were in for a pleasant surprise a couple of weeks ago. The public sector giant addressed their long-standing pet peeve by providing an option to shift to lower interest rates after paying a conversion fee of 1%.This will mean reduction in equated monthly installments (EMIs) or loan tenures, especially if you have taken a home loan prior to 2009, when the teaser, or dual, rate schemes were announced. For years, banks and housing finance companies (HFCs) have been accused of meting out step-motherly treatment to their existing home loan borrowers.
While the lenders are eager to offer lower rates to attract new customers, the largesse is not extended to the existing customers, even when the rates are falling. SBI has addressed the issue by coming out with the conversion scheme.
Other lenders like ICICI Bank, HDFC and Standard Chartered Bank also allow such conversions, subject to conditions, in return for a fee of 0.5%-1.75% Add to this the waiver of pre-payment penalties by HFCs as well as some banks, and the old customers are better equipped to secure their best interests than ever.
However, this does not imply that switching between, or within, the banks is going to be any easier. The decision has to be taken on the basis of multiple factors and a meticulous cost-benefit analysis.
ADVANTAGE SBI CUSTOMERS?
"Overall it's a good move by SBI as this would allow many customers to reduce the interest liability of their loans. We believe this would be more beneficial for customers with larger loan outstanding or a longer tenure," says Kapil Narang, COO, Ameriprise India, a financial planning firm. However, this does not mean that you will gain nothing if you are repaying a smaller-ticket-size loan.
"Now, say such borrowers wish to switch to another lender to avail of the lower rate of interest, and their existing lender has waived off the pre-payment penalty. But, they may still have to incur other expenses like processing fee, pre-sanction fee, advocates' fee for title investigation, valuers' fees for valuation report, stamp duty for loan agreement and mortgage etc. Instead, if they opt for conversion, such charges will not come into the picture," points out VN Kulkarni, chief counsellor with the Bank of India-backed Abhay Credit Counselling Centre.
ASSESS ALL PARAMETERS
In both the cases, it is critical to determine whether the savings on interest outgo would be substantial enough to justify the conversion. For arriving at this figure, you need to take into account several factors, including the balance tenure, loan outstanding, difference between current and new rates of interest, charges involved and the nature of the loan (that is, fixed or floating).
FIXED AND FLOATING
Probably, the first ones to be tempted by conversion offers would be those looking to alter the nature of their loans - from fixed to floating and vice-versa. Floating rate borrowers, after witnessing a sustained rise in rates over the last few months, could see this as an opportunity to move to fixed rates and bring in an element of certainty to their monthly budget.
However, this may not be advisable now, considering that fixed rates are significantly higher and interest rates are expected to start declining within a few months. On the other hand, if you have been servicing a high-interest, fixed loan, you may see floating-rate loan as a more sensible option.
"Customers with a fixed rate of 12% or more should consider switching to a floating rate because in the long run, the RBI may implement rate cuts, which will bring down lending rates," says Narang of Ameriprise. If you have obtained a 'teaser-rate' home loan scheme, floated by many banks, you can adopt a wait-and-watch policy.
"Such borrowers need to take a look at the rate of interest. If it is lower than the present floating rate, they should continue till the tenure ends and take a call then, as interest rates may soften in the coming days," says Kulkarni.
Then, there would be those who have made up their minds to switch to another lender to make the most of lower rates being offered. And, it is precisely these customers that conversion schemes like SBI's are targeted at, with an aim to keep them in the fold.
In this case, the cost-benefit analysis will depend on a combination of all the parameters mentioned so far. These factors will help you ascertain whether the savings arising out of internal conversion will be higher than transferring the loan to another bank or HFC.
"If the interest rate differential you are getting post switching your loan to another bank is substantial, it may make sense to switch, in spite of the prepayment and processing fee involved," says Narang. For instance, say you are repaying a Rs 50-lakh loan with a tenure of 20 years, taken in January 2008, when the interest rate was 13.75%.
Today, the bank's rate has dropped to 11% per annum, although the benefit hasn't accrued to you. Now, you have two options: Opt for the bank's conversion scheme after paying a charge of 1%, or switch to another lender who is offering a rate of 10.75%. If you opt for the conversion scheme, you will save Rs 16.67 lakh over the balance repayment period.
However, if you go for the refinancing option, your total savings will vary as per your existing bank's pre-payment penalty policy. In case you have to pay this fee, your savings in case of a switch will amount to Rs 17.21 lakh, after accounting for various charges. If the penalty has been waived off, it will be Rs 18.17 lakh. Thus, in this example, your net savings will be higher in switching than in conversion.
However, remember, reduction in interest pay-out need not be the sole deciding factor. You need to look at the ancillary charges mentioned earlier, like fees to be paid to the advocate and the valuer, to estimate the effective cost of the switch on your pocket.
"While evaluating your savings from the switching option, you must look at the cumulative effect for the remaining tenure. You should also consider the service quality from the new bank and the documentation hassles involved," adds Narang.
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CA. Rajesh Desai
RAJESH DESAI
MUMBAI: Five years after it was first put on the block, FMCG major Hindustan Unilever Ltd (HUL) has finally found a client for its marquee former headquarters at Backbay Reclamation in Churchgate. Housing finance giant HDFC has taken on lease the entire HUL House spread over 1.53 lakh sq ft.
"HDFC and its group companies will shift to this property," an HDFC spokesperson told TOI on Monday. "We are expanding rapidly and need more space for our staff." Although the spokesperson refused to reveal the transaction details, TOI has learned through market sources that HUL initially demanded Rs 200 a sq ft per month plus Rs 18 per sq ft for maintenance and property tax. "But HDFC must have negotiated hard and brought it down to around Rs 160," said a property consultant who tracked the deal. The annual rent could be Rs 25 crore. The outgoings will be paid by HUL.
The lease agreement is for three years. The ground-plus-seven-storey HUL House is located barely a few metres from the HDFC headquarters in Ramon House. HDFC also occupies four floors in Mistry Bhavan behind Ramon House.
HUL shifted out of its Churchgate headquarters in January 2010 after 46 years and moved into a 12.5-acre campus in Andheri (E). HUL first announced its plan to shift in 2006. "The idea behind the move was to integrate various business processes under 'One HUL Campus ' and to further integrate business processes and leverage scale and synergies across the organization," a HUL statement had stated.
The transition to the new campus was done in two phases. In Phase I, the foods business team was relocated from Bangalore to the erstwhile Mumbai head office on January 1, 2007. In Phase II, the head office was relocated to the new Andheri campus on January 25, 2010.
In the past few years, it unsuccessfully negotiated with several clients, including Royal Bank of Scotland and Development Bank of Singapore. State Bank of India and Bank of Baroda were also in talks with HUL to buy the property. But in January 2012, it decided to lease out the Churchgate building and offered it to potential clients for lease for five to nine years. It also offered the lessee the option to buy the property after the first three years.
NEW DELHI: India's biggest mortgage lender HDFC says home loan seekers can expect a 0.5-0.75% reduction in interest rates ahead of the festival season if the Reserve Bank of India reduces rates later this month.
"If market rates come down, it normally takes us two-to-three months to pass it on because our liabilities get re-priced," HDFC's managing director Renu Sud Karnad said. She said she was hoping that the central bank would reduce rates at its annual monetary policy review on April 17.
The RBI has raised interest rates 13 times since March 2010, by a cumulative 375 basis points in its efforts to tame inflation.
Costlier loans have forced potential home buyers to postpone their purchase decisions and have, in turn, impacted the real estate market. Homes sales in Mumbai have dipped by over 40% in the last one year while other cities have seen a 20% drop.
Karnad, however, said high interest rates have not had much impact on home sales falling in the Rs 20-50 lakh bracket, whether in big cities or Tier II cities, because the need and demand for homes in this price range continues to remain high. She said HDFC's home loan portfolio has increased in the last one year, but did not share the numbers.
"There is no concern or worry among young, middle-income Indians wanting to buy a house except in Mumbai, which is expensive," Karnad said.
While most cities across the country have seen steady home sales in the last few months, Mumbai has been a concern for developers as well as lenders.
Karnad, however, said even in Mumbai sales are happening in the suburbs, where price points are still affordable.
Home loan growth in smaller cities too has been phenomenal. Cities like Baroda, Lucknow, Chandigarh and Salem have seen 30-40% 0growth in home loans. "These markets might be small and this growth might be on a smaller base, but the fact is that there is demand.
What they need is better supply of homes," Karnad said. She said that the market expects a 10-15% cut in home prices, which seems to be high. Karnad also pointed out that builders are faced with rising cost of construction. Prices of cement, steel and labour have grown in the last two months, she added.
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AVNESH K JADAV
CA. Rajesh Desai
RAJESH DESAI
MUMBAI: Private insurer HDFC Life today posted its maiden profit of Rs 271 crore in FY12, mainly due to focus on cost containing and efforts on conservation.
"The back book has started generating sufficient profits to offset the new business strain incurred on writing of new policies. This along with our consistent focus on cost monitoring and containment and focused efforts on conservation ratio have helped reduced the operating expense ratio over the last three years," HDFC Life Managing Director and CEO Amitabh Chaudhry told reporters here.
Going by the trend, the company is expecting a double digit growth in this fiscal, he added.
"We are investing Rs 100 crore on technology over the next five years that will enhance our customer centric approach," he said.
HDFC Life, which has over 15,000 employees, is looking to 10 per cent workforce this fiscal, Chaudhry said.
The private insurer has three products in pipeline in the savings and health category, which will be a mix of both traditional and unit-linked, he said.
The company saw a growth of 13 per cent in total premium collection at Rs 10,202 crore during 2011-12, compared with Rs 9,004 crore in FY11.
Renewal premium income, individual business, grew by 29 per cent to Rs 6,345 crore in FY12 from Rs 4,924 crore in the previous fiscal.
The company, which is ranked at number two amongst private life insurance companies, gained its market share by 260 basis points to 15.5 per cent in FY12.
The private life insurer achieved 96.17 per cent with the total individual death claims paid in FY 2011-12 was Rs 96.97 crore.
CA. Rajesh Desai
RAJESH DESAI
Housing finance company HDFC is expected to report a growth of 8.5% year-on-year in its profit after tax of Rs 1,239 crore for the fourth quarter of FY12, according to CNBC-TV18 poll.
Net revenues are likely to increase by 11% to Rs 1,831 crore in the quarter ended March 2012 from Rs 1,655 crore in the corresponding quarter of last fiscal.
Highlights
Top-line and bottom-line likely to be muted due to large base effects.
HDFC will show muted growth in net profit as last year profits included a one-time gain from stake sale of Lafarge India
But core earnings will still see a strong growth
Investment gains estimated around Rs 98.6 crore versus Rs 130 crore (YoY)
Spreads are expected to remain largely stable - may see some pressure due to higher funding costs
18% growth in loans expected
Non interest income expected to remain moderate
Asset quality is expected to continue to be strong
HDFC Ltd will announce its fourth quarter earnings today. According to an ET Now POLL, the company is likely to post a net profit increase of 6% YoY. The bank's spread is expected to remain largely stable at 2.2%-2.3% QoQ and its asset quality is likely to remain healthy.
Key highlights:
NII at Rs 1,495 cr vs Rs 1,371, up by 9% YoY
PPP at Rs 1,660 cr vs Rs 1,579 cr, up 5% YoY
PAT at Rs 1,215 cr vs Rs 1,142cr, up 6% YoY
Expect spreads to remain stable at 2.2%-2.3% QoQ
Non-interest income likely to moderate YoY on a higher base
Loan growth likely at around 20% YoY
Asset quality will continue to be healthy
3QFY12 Gross NPA 0.53% on 180-day overdue
Key factors to watch:
a) Movement in spreads
b) Loan growth and guidance
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CA. Rajesh Desai
RAJESH DESAI
India’s largest housing finance major Housing Development Finance Corporation (HDFC) on Monday reported a forecast beating 16% year-on-year in its fourth quarter net profit at Rs 1,326 crore aided by higher interest income. Net interest income or the difference between interest earned and paid out climbed nearly 24% to Rs 1,867 crore.
However, the profit on the sale of investment fell sharply to Rs 79 crore compared with Rs 134 crore recorded in the corresponding quarter of the previous year.
Net profit rose slightly at a higher pace of 17% y-o-y to Rs 4,123 crore for the year ended March 31, 2012. The company has proposed a dividend of Rs 11 per share.
Its loan book expanded 20% y-o-y to around Rs 1.41 lakh crore. The average size of individual loans stood at Rs 19.50 lakh as against Rs 18.60 lakh a year back. Consequently, total borrowing of the corporation too went up 21% y-o-y to Rs 1.39 lakh crore.
The mortgage lender continues to maintain its asset quality. Gross non-performing asset ratio (NPA) ratio inched up to 0.74% at Rs 1,070 crore as against 0.77% a year ago.
"This is the twenty-ninth consecutive quarter end at which the percentage of non-performing loans have been lower than the corresponding quarter in the previous year," HDFC said in a release.
CA. Rajesh Desai
RAJESH DESAI
Key highlights:
NII at Rs 1,495 cr vs Rs 1,371, up by 9% YoY
PPP at Rs 1,660 cr vs Rs 1,579 cr, up 5% YoY
PAT at Rs 1,215 cr vs Rs 1,142cr, up 6% YoY
Expect spreads to remain stable at 2.2%-2.3% QoQ
Non-interest income likely to moderate YoY on a higher base
Loan growth likely at around 20% YoY
Asset quality will continue to be healthy
3QFY12 Gross NPA 0.53% on 180-day overdue
Key factors to watch:
a) Movement in spreads
b) Loan growth and guidance
CA. Rajesh Desai
RAJESH DESAI
A copy of Suprme Court judgement is interesting - pfa
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CA. Rajesh Desai
RAJESH DESAI
Shares in HDFC fell 3.7% after MSCI (Morgan Stanley Capital International) reduced HDFC's weightage in its indices. MSCI reduced the weightage of HDFC in its indexes to accommodate new addition and deletions, as part of its semi-annual review of the composition across all country indices.
Keki Mistry, vice-chairman and CEO, HDFC clarifies to CNBC-TV18 that the cut in rating is inaccurate and plans to talk to MSCI about reversing the cut.
Below is an edited transcript of the interview to CNBC-TV18. Also watch the accompanying video.
Q: Have you written to MSCI to clarify the calculation or tabulation of FII ownership at much higher levels and therefore HDFC's weightage does not deserve to be cut down by as much as it has?
A: We have not yet written to them, because we are trying to figure out the right person to talk to.
But according to our understanding, Morgan Stanley has looked at HDFC’s foreign ownership cap at 74% which is not correct, because our foreign ownership cap, in reality, could be 100%.
There is no capping or reversal on foreign ownership as far as HDFC is concerned.
In 1995 HDFC had a private placement of shares through which more than USD 50 million was brought into India from overseas. And as the RBI's rules do not apply, HDFC's cap could be 100%.
So that's something we want to clarify to MSCI, but we want to first talk to them and understand why our weightage was reduced.
Q: Where does the bank's FII holdings stand currently and where is the FDI limit?
A: The total FII, shareholding, between FDIs and FIIs, is about 71%.
Q: So according to your calculation foreign holdings could go up to 100%?
A: This is FII plus FDI, not just FII.
Q: So if foreign holdings can go up to 100%, do you think the weightage in reduction should be up on the index?
A: Frankly, I have no idea how this calculation is done, so I wouldn't be able to comment. But logically it should go back to where it used to be.
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CA. Rajesh Desai
RAJESH DESAI
| Allotment of shares pursuant to exchange of Warrants | 12/06/12 13:13 | ||
| Housing
Development Finance Corporation Ltd has informed BSE that the
Corporation on June 12, 2012 allotted 40,20,250 equity shares of Rs. 2
each pursuant to exchange of 40,20,250 Warrants by 24 Warrant holders of
the Corporation. Further, the Corporation has extinguished the said 40,20,250 Warrants and the outstanding Warrants post the said exchange stands at 5,06,42,030. Post the above allotment, the paid-up equity share capital of the Corporation would stand at Rs. 296,43,63,480 consisting of 148,21,81,740 equity shares of Rs. 2 each. |
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CA. Rajesh Desai
RAJESH DESAI
The audited accounts of HDFC present a true & fair opinion. Vested intersts are at play at a time when Warrants are due for conversion.
I will post my report in a few hours from now.
Rajesh ji , I know that you have have informed us that you are sending your views on Macquaire report, but please send a quick update.You may send detailed notes later on.--
Rohan Shukla,Stag Investor cum Trader
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CA. Rajesh Desai
RAJESH DESAI
Dear RD ji
I too agree with your views. There is nothing which is illegal or
otherwise which is being practiced by the company. The only thing that
hurts a bit is the fact that there has been no clear NOTE atleast
pertaining to such practices.
regards
gupt
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CA. Rajesh Desai
RAJESH DESAI
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CA. Rajesh Desai
RAJESH DESAI
I had sent a mail to the management with this request. The management has decided to do so. PFA.
This shows the quality of management.
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CA. Rajesh Desai
RAJESH DESAI
Nirmal Bang is bullish on Housing Development Finance Corporation (HDFC) and has recommended buy rating on the stock with a target of Rs 720 in its July 3, 2012 research report.
“Housing Development Finance Corporation (HDFC) since Febuary’12 had declined in a descending channel pattern which was successfully breached recently with tall white candle formations. The stock prior to the breakout formed a higher bottom which was successfully defended couple of times around the Rs630-Rs635 levels. The prices have managed to exceed their May’12 high which is a bullish Dow signal indicating a start of a higher high and low formations. The MACD has given a bullish crossover and has entered into the bullish territory. The indicator has also exceeded the descending trend line drawn from the January’12 highs which bullish.”
“The RSI indicator is currently rising and is above its March-April’12 highs indicating bullish momentum in the stock. The prices in short term are likely to test the falling window pattern which coincides with the short term rising channel drawn from the May’12 low which is around the Rs690-Rs695 levels. Decisive close above the Rs700 levels would fill the falling gap and would increase the possibility for the stock to test its previous all time high,” says Nirmal Bang research report.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
HDFC Warrants on NSE
Security-wise Delivery Position (3JUL2012)
Quantity Traded 39,44,200
Deliverable Quantity (gross across client level)
19,83,200
% of Deliverable Quantity to Traded Quantity
50.28 % On Wed, Jul 4, 2012 at 11:57 AM, SURESH JOSHI <joshisu...@gmail.com> wrote:
HDFC on NSESecurity-wise Delivery Position (3JUL2012)
Quantity Traded 29,84,117
Deliverable Quantity (gross across client level)
24,30,447
% of Deliverable Quantity to Traded Quantity
81.45 %
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CA. Rajesh Desai
RAJESH DESAI
Housing finance company HDFC is expected to report a growth of 18% year-on-year in its profit after tax of Rs 999 crore for the quarter ended June 2012, according to CNBC-TV18 estimates.
Net interest income is likely to spike 28% to Rs 1,274 crore in the first quarter of financial year 2012-13 as against Rs 998 crore in a year ago period.
Steady Earnings
Net interest income growth helped by healthy 19-20% growth in loans and a 19-20% growth in disbursements
In fourth quarter of FY12, net interest income rose 29% YoY to Rs 1,681 crore
Analysts on average expect spreads around 2.27%
Net interest margins are likely to be steady around 4.2% to 4.3%. Loan re-pricing of teaser loans should help margins. Year-on-year margins will be higher, but QoQ the margins should look lower because typically Q4 sees the highest margins.
Net interest margin stood at 4.4% and 3.3% in the fourth quarter and first quarter of previous financial year, respectively.
Analysts expect a steady loan growth of 18% to 20% to continue. In the previous quarter, loan book grew by 20% to Rs 1.4 lakh crore. Approvals increased by 20% and disbursements went up by 18%.
Watch out for lower non-interest income due to lower fee income + sale from investments (Rs 20 crore) and lower dividend income as the HDFC Bank dividend will accrue in Q2 only.
In Q4 FY12, fee income declined 23% to Rs 60 crore and sale from investments went down by 40% to Rs 79 crore. Dividend rose by 7% to Rs 62 crore.
Asset quality will continue to be healthy
In the fourth quarter of previous financial year, gross non-performing assets (NPA) fell 3 basis points to 0.74%
Profit growth might be restricted to 17 to 18% due to lower dividend and treasury income
--
Sachin Godbole
--
CA. Rajesh Desai
RAJESH DESAI
HDFC did not face any slowdown: Keki Mistry
Mumbai: Mortgage lender HDFC today said that it was not affected by any slowdown after it posted a 18.6 percent jump in net profit for June quarter at Rs 1,002 crore notwithstanding a slump in the real estate market.
“We have not seen any slowdown at all. The individuals component of our loan book grew very strongly,” HDFC vice chairman and chief executive Keki Mistry told reporters in Mumbai.
Mistry said its ‘individual’ segment grew 29 percent and accounted for 90 percent of the incremental growth in the loan book at Rs 6,635 crore during the quarter.
Making money. Reuters
The loan growth in corporate segment stood at 14 percent.
The growth has come from across the country, except Mumbai, which felt the impact of slowdown and constituted 12 percent of the loan book, HDFC chairman Deepak Parekh told shareholders at its annual general meeting also held today.
The core net interest income of the pure-play mortgage lender jumped to Rs 1,372.55 crore from Rs 1,170.86 crore for the quarter.
Its net interest margin came down from the 4.4 percent in the preceding March quarter to 4 percent in June, but Mistry attributed it to cyclical factors wherein the margins in the first quarter are always lower.
He said that the NIM should be compared with the figure in the year ago period and pointed out that when done so, the margins have shown only 0.02 to 0.03 per cent dip.
Going ahead, the company is targeting a deposit growth of 30 percent and up to 20 percent expansion in credit for the fiscal year, Parekh said.
Driven by a revisioning of the standard asset provisioning norms, the bank’s provisions for contingencies grew to Rs 40 crore during the quarter from the year ago period’s Rs 18 crore, Mistry said.
On asset quality, its gross non-performing assets ratio stood at 0.79 percent versus the 0.83 per cent an year ago.
Its total capital adequacy stood at a comfortable 14.6 percent, with the core tier-I at 11.8 percent.
Parekh said it will not go for any fresh fund infusion in near future unless some of its subsidiary companies decide to go for an acquisition.
The HDFC scrip closed 0.62 per cent down at Rs 678.30 apiece on BSE, whose 30-share main barometer Sensex shed 0.73 percent.
Meanwhile, the company’s shareholders passed an enabling resolution to raise the FII shareholding limit to 100 percent from the current 74 per cent at the AGM today.
This was prompted by a recent move by Citibank, which had invested through the foreign direct investment route, to sell its holding in the company which has raised the FII holding to 71 percent at present, Mistry explained.
Mistry also said that the company’s unrealised gains from investments currently stand at over Rs 42,000 crore, with listed entities accounting for a majority Rs 27,000 crore.
PTI
MUMBAI: The country's largest mortgage lender HDFC today reported 18.6 per cent rise in net profit at Rs 1,002 crore during the April-June quarter, over the year- ago period, because of healthy growth in advances.
"Our net profit rose to Rs 1,001.9 crore for the June quarter, compared to Rs 844.53 crore in the year-ago period. Total income increased to Rs 4,942.31 crore from Rs 3,821.6 crore during the year ago quarter," HDFC Chairman Deepak S Parekh told the shareholders at the annual general meeting here this afternoon.
Parekh said, "The loan book grew to Rs 1.48 trillion (Rs 1.48 lakh crore) during the quarter, up from Rs 1.24 trillion. This is excluding the loans sold to sister concern HDFC Bank during the preceding 12 months period worth Rs 4,978 crore."
Net interest income of the pure-play mortgage lender jumped to Rs 1,372.55 crore from Rs 1,170.86 crore, while its tax liability rose to Rs 378 crore from Rs 331 crore during the quarter.
Income from operations rose to Rs 4,914.71 crore during the reporting quarter up from Rs 3,800.67 crore in the year ago quarter.
The stock closed at Rs 678.30, down 0.62 per cent on the Bombay Stock Exchange today. The Sensex ended the day 0.73 per cent lower at 17,489.14
Speaking about the economy, Parekh added that deteriorating macroeconomic parameters were a cause for alarm.
"Despite issues, India has managed GDP growth rate of 6.5% in FY12," he said.
Muted capital inflows and oil imports have widened the current account gap, he said.
Lack of fiscal rectitude and politics have stalled reforms process, Parekh added.
HDFC's result was largely in line with estimates.
According to an ET Now estimate, the company was expected to report an 18 per cent YoY increase in profit after tax of Rs 993 crore for the first quarter of fiscal 2013.
Brokerage firm Angel Broking was of the view that the bank will report healthy operating income growth of 20.0 per cent YoY to Rs 1,568 cr.
Analysts' views on HDFC:
Kunal Bothra, Senior Technical Analyst - Manager Advisory at LKP Securities Ltd
HDFC continues to trade in its long term band seen clearly in its weekly charts. From a medium to long term perspective, the stock still remains rangebound. For the stock to show some reasonable upside, it has to break two crucial resistance levels, at Rs 700 and Rs 725 levels respectively. Once that happens with strong volumes, the consolidation pattern would lead to a decent breakout on the upside, with higher target of Rs 800 and above.
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Manmohan Tandan
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CA. Rajesh Desai
RAJESH DESAI
| 12-Jul-2012 16:28 | |
| Subject | Updates |
| Announcement | Housing Development Finance Corporation Limited has informed the Exchange that the Corporation on August 24, 2009 had issued and allotted 1,09,53,706 Warrants simultaneously with NCDs to domestic Qualified Institutional Buyers on a Qualified Institutions Placement (QIP) basis pursuant to and in accordance with the provisions of Chapter XIII-A of the SEBI (Disclosure and Investor Protection) Guidelines, 2000, with a right exercisable by the Warrant holder to exchange each Warrant with one equity share of Rs. 10 each of the Corporation, any time on or before August 24, 2012, at a Warrant Exercise Price of Rs. 3000 per equity share of Rs. 10 each of the Corporation. Consequent to the subdivision of the face value of the equity shares of the Corporation from Rs. 10 per equity share to Rs. 2 per equity share with effect from August 21, 2010, the Warrant Exercise Price was adjusted from Rs. 3000 per equity share of Rs. 10 each to Rs. 600 per equity share of Rs. 2 each and accordingly the number of Warrants outstanding were increased to 5,47,68,530. Further note that, as on date 86,99,570 Warrants have been exchanged with the equity shares of Rs. 2 each of the Corporation and consequently, 4,60,68,780 Warrants are outstanding. In this connection kind attention is invited to Clause 5.2.1 of the Terms and Conditions of the Warrants in the Placement Document dated August 21, 2009, wherein the Warrant holders are entitled to exercise their right to exchange the said Warrants up to 5 p.m. on August 24, 2012 in Mumbai (but in no event thereafter) (Warrant Exercise Period). Further, any Warrants which are not exercised on or before 5:00 p.m. on August 24, 2012, will lapse and cease to be valid and any amounts paid towards them to date will stand forfeited. |
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CA. Rajesh Desai
RAJESH DESAI
Shareholding pattern - pfa
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CA. Rajesh Desai
RAJESH DESAI
Housing Development Finance Corporation Ltd.Credit Suisse
Lending operations were strong and margins were stable in Q1. Management has guideed for 20% growth. Cost/income may rise in FY13 on the back of higher competition.
Housing Development Finance Corporation Ltd.JP Morgan
Expect the core business to stay robust. HDFC’s competitive position is likely to improve. Asset quality still looks strong.
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Tanya Mehra.
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CA. Rajesh Desai
RAJESH DESAI
Don't see any stress in retail loans in coming qtrs: HDFC
Mortgage lender HDFC on Tuesday met the market expectation in its first quarter results. However, a section of market participants are a bit apprehensive of the quality of retail assets. In an interview with moneycontrol.com the lender’s vice-chairman and CEO - Keki Mistry sounded confident of its retail home loan portfolio.
Saikat Das
moneycontrol.com
India's largest mortgage lender Housing Development Finance Corporation (HDFC) on Tuesday met the market expectation in its first quarter (April-June) results. However, HDFC shares were nearly 1% down to close the day at Rs 677 on profit booking. Despite posting significant growth in its loan book, a section of market participants is a bit apprehensive of the retail asset quality in the coming quarters as the bug of economic slowdown continues to bite.
In a brief telephonic interview with moneycontrol.com the lender's vice-chairman and CEO - Keki Mistry sounded confident of its retail home loan portfolio and did not predict any asset quality stress, going forward.
Below is the edited excerpt of the interview:
Q: What was the key driver for HDFC's Q1 results?
A: A strong loan book growth coupled with a better asset quality added to our net profit. The non-performing asset ratios have improved year-on-year basis. However, the NPAs fell slightly quarter-on-quarter basis. You cannot compare the NPA levels sequentially. In March (Jan-March), NPAs hit historical low level. If you compare NPAs y-o-y basis, we have improved our asset quality n the last 30 consecutive quarters.
Q: What is your outlook for loan growth in FY13?
A: As I said earlier, our book would grow at 18-20%. The outlook for credit growth remains unchanged. Nothing has happened in the first quarter that would prompt us to change the outlook. In the last year too (FY12), we projected the same loan growth but we ended the year at 23%. We have always been above the industry average.
Also read: HDFC Q1 net profit up 19% on strong loan growth
Q. With the economic slowdown hitting hard, do you foresee any stress coming from your retail assets?
A: I do not see any stress on our retail portfolio. The consumer behavior so far is very good. Our retail customers continue to repay their loans timely.
Q. During the quarter, retail loans showed higher growth. Will the trend continue?
A: It all depends how the economy turns out to be. However, the trend should continue in the rest of the year (FY13) given the current situation.
Q. Can you tell us about the composition of your loan book?
A: Loans to developers form 13% of our total loan book while 67% is from retail home loan customers. For the rest (20%), we give loans to companies to meet their own or their employees’ real estate requirements. We too disburse loans in the form of rental discounting, wherein we disburse fresh loans to companies against the rent receivables from their existing properties. This composition is likely to continue. So far in FY13, retail segment has shown higher growth representing 90% of the increase.
Q: What is your outlook for interest rates?
A: At this point of time, I do not see any case for interest rate cut. Our cost of borrowings remain unchanged (read at elevated level). In the coming few weeks, a lot of data is going to be released like IIP, inflation and so on. Unless those data give some positive indication coupled with a good monsoon, the Reserve Bank of India too will not take any relook in slashing policy rates.
Q: What is your projection for GDP growth?
A: It is a little early to talk about this. I think, we should cross 7% GDP for sure, unless there is a bad monsoon and the policy paralysis continues. GDP should be in the range of 7-7.50%.
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CA. Rajesh Desai
RAJESH DESAI
Key takeaways:
- Despite strong growth in the last few years, the Indian housing finance industry remains fairly underpenetrated. This coupled with changing demographics offers strong growth potential for housing finance companies. HDFC is confident of achieving 18-20% asset growth over the next 5-10 years.
- Subsidiaries /associates have grown sizable and have become self-sufficient. The life insurance business has turned profitable and should not need further capital infusion. HDFC does not need to dilute capital to fund subsidiaries; strong core RoE will help fund own growth. Value unlocking through listing of insurance subsidiary could provide capital for infusion in HDFC Bank, as and when needed.
- HDFC largely maintains its guidance on its four core parameters - (1) consolidated RoE to improve by 100bp (except for FY13, due to warrant conversion) every year for the next three years, (2) growth to be maintained at 18 20%, (3) spreads to be in the 2.15-2.35% range, and (4) cost-to-income ratio may not improve in FY13 due to acquisition of new office building and change in taxation-related provisions on certain services.
Recommendation: Motilal Oswal believes that the valuations are attractive, considering the growth potential (FY12-14E earnings CAGR of ~20%), sound business fundamentals, and substantially improved performance of subsidiaries. Buy with an SOTP-based TP of Rs800 (17% upside).
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CA. Rajesh Desai
RAJESH DESAI
FAQs - Exchange of Warrants - PFA
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Karishma Suvarna
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CA. Rajesh Desai
RAJESH DESAI
| Scripcode : 500010 Company : Housing Development Finance Corp.Lt | View All | |||||||||
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CA. Rajesh Desai
RAJESH DESAI
| Allotment of shares pursuant to exchange of Warrants | 08/08/12 17:17 | ||
| Housing
Development Finance Corporation Ltd has informed BSE that the
Corporation on August 08, 2012 allotted 37,98,400 equity shares of Rs. 2
each pursuant to exchange of 37,98,400 Warrants by 103 Warrant holders
of the Corporation. Furhter, the Corporation has extinguished the said 37,98,400 Warrants and the outstanding Warrants post the said exchange stands at 25,025,045. Post the above allotment, the paid-up equity share capital of the Corporation would stand at Rs. 302,06,98,760 consisting of 151,03,49,380 equity shares of Rs. 2 each. |
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CA. Rajesh Desai
RAJESH DESAI
13 Aug, 2012, 05.08AM IST, MC Govardhana Rangan & Shilpy Sinha,ET Bureau
Our numbers suggest there is no slowdown: V Srinivasa Rangan, Executive Director, HDFC
Housing Development Finance Corp has performed well consistently. Even during the bad times, it posted steady earnings growth. How long can it sustain? Will the current economic slowdown hurt the biggest mortgage lender? In an interview with ET, HDFC Executive Director V Srinivasa Rangan says it is still rock solid and defends the accounting practices amid questions about it. Excerpts:There is a belief that real estate prices never go down?
In a developing economy, there is fundamental demand. People are buying home for the first time or they are upgrading in terms of larger size and better location. Land prices are not controlled and have to be acquired at market price. There is limited supply of land, so prices are not likely to correct significantly. Major demand is for properties in the range of 50 lakh to 1 crore. So we are seeing demand from Noida, Greater Noida, Chennai, Pune and Gurgaon.
How is the economic slowdown affecting the mortgage business?
Our numbers over the past many quarters, including the quarter ended June 30, suggest there is no slowdown. We have been targeting the affordable housing segment and that category is doing well.
How much of it is influenced by value?
Our average loan last year was 19.6 lakh; for the quarter ended June 30, 2012, it was 21.4 lakh. So, there is an element of property value increasing. This happens due to property price moving up, coupled with increased affordability, allowing customers to buy at better locations or larger-size apartments.
In the last 6-7 years, HDFC's loans to corporates have gone up.
We have been maintaining a ratio of 67% to 33%, with 67% being retail loans and 33% being non-retail. Within the 33% of non-retail, there are three segments. One is rental discounting, where you lend to a developer against the property that is already leased out and these are generally multinationals like IBM , Goldman Sachs, etc, and this constitutes about 7%. The exposure is on the rentals and not on the project. Another 13% is to Indian corporates who want to buy their own office and also provide housing to their employees, especially the large manufacturing companies. Then, there is construction finance to developers, predominantly for residential category construction, which is another 13%. Here, we finance developers who need some working capital for construction before they can actually get money from customers. Loans to developers also help us acquire retail customers who buy in these residential projects. Our main business is retail and will always remain so.
Some analysts have questioned the accounting practices at HDFC and have termed it aggressive. A report by Macquarie said HDFC's accounting inflated profits.
The point that has been raised in the Macquarie report regarding the adjustment for zero coupon bonds is not new and has been clarified on several occasions by HDFC. It needs to be understood that HDFC is both a housing finance company and also a financial holding company. As a financial holding company, HDFC has been making investments in its subsidiaries and associates - bank, insurance companies and mutual fund. Under the Indian GAAP, the accounts of HDFC are presented on a standalone basis wherein only the dividends received from subsidiaries and associates are included as part of the income and its true share of profit in its subsidiaries and associates is not considered as part of HDFC's profits. HDFC has made its investments in subsidiaries and associates out of the amounts borrowed by way of zero coupon debentures and, therefore, the interest cost on such borrowings amounting to 485 crore during the year 2011-12 (net of tax) has been charged to securities premium account as per Section 78 of the Companies Act. For the year ended 2012, if the proportionate share of profits of HDFC in its subsidiaries and associates is considered, the profits of HDFC will be higher by 1,340 crore after reducing the dividends received from the subsidiaries and associates. Under these circumstances, if the aforesaid interest cost on zero coupon debentures is charged to profit and loss account, HDFC's profits would still be higher by 855 crore.
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CA. Rajesh Desai
RAJESH DESAI
| Allotment of shares pursuant to exchange of Warrants | 8/14/2012 4:51:33 PM | |
| Housing
Development Finance Corporation Ltd has informed BSE that the
Corporation on August 14, 2012 allotted 39,83,400 equity shares of Rs. 2
each pursuant to exchange of 39,83,400 Warrants by 81 Warrant holders
of the Corporation. Furhter, the Corporation has extinguished the said 39,83,400 Warrants and the outstanding Warrants post the said exchange stands at 1,86,26,795. Post the above allotment, the paid-up equity share capital of the Corporation would stand at Rs. 303,42,24,180 consisting of 151,71,12,090 equity shares of Rs. 2 each. |
HDFC ERGO introduces new motor insurance add-on covers
The industry has been selling the traditional “Liability only” and “Package policies” covering the motor vehicles in India.
Car and home remain the most aspirational acquisitions for the rising middle class in India. Primarily because of its mandatory nature, motor insurance constitutes approximately 45% of the non-life insurance business and remains one of the fastest growing business lines in the country. However, seemingly not much has changed when it comes to the product offering in motor insurance. The industry has been selling the traditional “Liability only” and “Package policies” covering the motor vehicles in India. Despite deregulation of business in 2007 not much has changed in the realm of motor insurance.
Having said that, it would be fair to mention that one is now beginning to see some changes in the product offering post de-tariffing in 2007. These additional covers are offered as “add ons” to the standard policy since the basic structure of the motor insurance policy can't be changed. These “add ons” offer cover in addition to the basic policy and can help recover maximum cost arising out of an insured accident.
HDFC ERGO General Insurance, the 4th largest private sector general insurance company in India has included some add-ons in its Motor Insurance portfolio. Among them the one which can really prove to be beneficial for the customer during monsoon is “Engine and Gear Box Protector”.
This add-on is offered for the consequential damage to the internal child parts of the engine and/or gear box of the Insured Vehicle, arising out of : Water ingression or leakage of lubricating oil And/Or damage to engine and/or gear box of the Insured Vehicle arising out of leakage of lubricating oil due to Accidental means.
Through this cover, the customer can be benefited with the below
1.Repair or replacement of the internal child parts of the engine
2.Repair or replacement of the internal parts of the gear box
3.Labour cost incurred by the Insured to overhaul the damaged engine and/or gear box
4.Engine cylinder re-boring, compression tests & other machining charges
Mukesh Kumar, Member of Executive Management, Head - Strategic Planning, HR & Marketing said “With growing needs and dynamic external factors, the regular motor insurance is no longer sufficient. Keeping this in mind; HDFC ERGO has designed the motor insurance add-ons which offer greater benefits to our customers at minimum additional cost. Going forward, we will continue to innovate our offerings for benefit of our consumers.”
The other motor insurance add-on covers are
1.Zero Depreciation Cover : This cover pays for the depreciation of part for partial loss claims, which means that you will have minimum out-of-pocket expenses in the event of an accident
2.Loss of Use Cover : Pays a daily benefit for each day that the vehicle is in a garage following an accident, claim being admissible under the Own Damage part of the policy
3.No Fault Claim Protection : Protects the No Claim Bonus accrued, in case of losses on account of specified perils, such as damages due to flood, damage only to windshield etc
4.Emergency Assistance Cover : This cover lets you enjoy a pleasurable & uninterrupted drive. The program assists customers to avail immediate and hassle free On Site Repairs or Towing service in the event of a motor breakdown or accident.
5.Higher Protection and Removal Costs : This cover pays higher cost of protection over and above the amounts as defined by India Motor Tariff.
Generally, the add-ons offer additional benefits and coverage options that may be available to you on paying additional premium. It is always advisable to read through the details to decide whether it suits your requirement or not. At the end the insurance policy should ensure that you to get back in the driver's seat quickly, no matter what happens to your vehicle.
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CA. Rajesh Desai
RAJESH DESAI
FIIs may step up their exposure to Indian stocks as MSCI raises India weightage
The global indices provider's announcement on Thursday coincided with the National Stock Exchange replacing SAIL and Sterlite with Lupin and UltraTech Cement in the benchmark Nifty 50. The MSCI changes will take effect from September 3 while Nifty changes will apply from September 28.
While both moves will have significant impact, MSCI's move is more material as the sheer quantum of funds pumped by overseas investors into Indian markets is much larger than what domestic funds allocate to Nifty stocks.
"Generally for FIIs, MSCI matters a lot... these will be more material than the changes in Nifty," said Gopal Agrawal, CIO, Mirae Asset Global Investments.
Apart from raising India's weight in its Emerging Market Index, MSCI raised mortgage financier HDFC's weight to 7.4% from 6.21% while reducing the weights of Tata Consultancy Services, Reliance Industries and Hindustan Unilever by 10 basis points (a tenth of a percentage point) each. MSCI has removed Bombay Rayon Fashions, Mindtree, Nava Bharat Ventures and Time Technoplast from the MSCI India Index.
This reshuffle will result in estimated foreign funds flow of nearly $126 million into HDFC, according to Morgan Stanley India.
The stocks that would be impacted negatively are Hindustan Unilever, with an outflow of foreign funds to the tune of $10 million, RIL $4 million and Infosys $3.8 million, it added.
Indian equities have attracted more foreign institutional flows than any other Asian market so far in 2012 as portfolio investments resumed in July on renewed hopes of policy action by the government to revive the economic growth. Foreign funds have poured close to $11 billion (Rs 55,000 crore) into Indian equities so far this year. A majority of the flows into India this year have been by exchange-traded and India-dedicated funds, brokers said.
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CA. Rajesh Desai
RAJESH DESAI
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CA. Rajesh Desai
RAJESH DESAI
| Status of Warrants exchanged into equity shares | 8/23/2012 8:28:14 PM | |
| Housing
Development Finance Corporation Ltd has informed BSE that this is in
continuation to company's disclosures on August 02, 2012, August 13,
2012 and August 17, 2012 wherein Company had informed to exchange that
in Terms of Clause 5.2.1 of the Terms and Conditions of the Warrants in
the Placement Document dated August 21, 2009, the Warrant holders would
be entitled to exercise their right to exchange the Warrants into
corresponding number of equity shares, up to 5 p.m. on August 24, 2012
in Mumbai (but in no event thereafter) (Warrant Exercise Period) and
consequently, any Warrant not exercised on or before the said Warrant
Exercise Period, will lapse and cease to be valid and amounts paid by
the Warrant holder in that regard, will stand forfeited. Consequently,
such Warrants will be extinguished by the Corporation, and no further
claims shall lie against the Corporation after the said date. Further, the Company has provide details of the Warrants which have been exchanged into equity shares/ outstanding, as on the said date, for your information. Particulars :Total Warrants issued No. of Warrants : 5,47,68,530 Percentage of warrants : 100.00 Amount (Rs. in Crores ) : 3,286.11 Particulars : Warrants received for exchange into equity shares and allotted up to August 23, 2012 No. of Warrants : 5,10,62,025 Percentage of warrants : 93.23 Amount (Rs. in Crores ) : 3.063.72 Particulars :Warrants received for exchange and under process as at August 23, 2012 No. of Warrants : 30,94,955 Percentage of warrants : 5.65 Amount (Rs. in Crores ) : 185.70 Particulars : Warrants outstanding as at August 23, 2012. No. of Warrants : 6,11,550 Percentage of warrants : 1.12 Amount (Rs. in Crores ) : 36.69 The Company once again reiterate that, Warrants not exchanged on or before the said Warrant Exercise Period viz, up to 5 p.m. on August 24, 2012 in Mumbai (but in no event thereafter), will lapse and cease to be valid and amounts paid by the Warrant holders in that regard, will stand forfeited. Consequently, such Warrants will be extinguished by the Corporation and no claim shall lie against the Corporation after the said date. |
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CA. Rajesh Desai
RAJESH DESAI
Warrants if they are not subscribed for getting 1 share@ 600 in lot of 1850 shares will lapse within a few hours hence some funding action on spot payment basis may be happening coupled with bears playing the field.
Why is HDFC down from 735 to 717 inspite of good news?
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Chuni
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CA. Rajesh Desai
RAJESH DESAI
| Allotment of Shares pursuant to exchange of Warrants | 8/24/2012 6:24:03 PM |
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| Housing
Development Finance Corporation Ltd has informed BSE that the
Corporation on August 24, 2012 has allotted 17,28,705 equity shares of
Rs. 2 each pursuant to exchange of 17,28,705 Warrants by 79 Warrant
holders of the Corporation. Further the Company informed that the Corporation has extinguished the said 17,28,705 Warrants and the outstanding Warrants post the said exchange stands at 19,77,800. Post the above allotment, the paid-up equity share capital of the Corporation would stand at Rs. 306,84,39,350 consisting of 153,42,19,675 equity shares of Rs. 2 each. |
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CA. Rajesh Desai