www.forbesindia.com Open in urlscan Pro
2600:141b:5000:583::3393  Public Scan

Form analysis
5 forms found in the DOM

POST

<form onsubmit="javascript:return doSubmitSearch('d');" method="post">
  <input type="search" placeholder="Search..." id="tags" name="searchtext1" value="" class="ui-autocomplete-input" autocomplete="off">
</form>

---

Name: newsletterform —

<form role="form" name="newsletterform">
  <div class="input-group"> <input type="email" id="newsemail" name="newsemail" class="form-control" placeholder="Enter email to subscribe"> <span class="input-group-btn"> <button class="btn" type="submit"
        onclick="return newslvalidate();">SUBMIT</button> </span></div>
</form>

---

Name: registration —

<form role="form" class="form-horizontal" name="registration">
  <div class="form-group">
    <label for="email" class="control-label col-md-2 col-sm-12 hidden-xs">Name</label>
    <div class="col-md-6 col-sm-12">
      <input type="text" placeholder="Name" class="form-control" name="name">
    </div>
    <div class="col-sm-4 col-sm-12 text-info">Required</div>
  </div>
  <div class="form-group">
    <label for="pwd" class="control-label col-md-2 col-sm-12 hidden-xs">Email Address</label>
    <div class="col-md-6 col-sm-12">
      <input type="text" placeholder="Email-You'll get a mail on your comment approval" class="form-control" name="useremailid" id="useremail">
    </div>
    <div class="col-md-4 col-sm-12 text-info">Required, will not be published</div>
  </div>
  <div class="form-group">
    <label for="pwd" class="control-label col-md-2 col-sm-12 hidden-xs">Comment</label>
    <div class="col-md-6 col-sm-12">
      <a href="javascript:;">  <textarea class="form-control" cols="" rows="3" placeholder="Comment" name="comment"></textarea></a>
    </div>
    <div class="col-md-4 col-sm-12 text-info">All comments are moderated</div>
  </div>
  <div class="form-group">
    <div class="col-sm-offset-2 col-sm-6">
      <button class="btn btn-primary text-uppercase" type="submit" onclick="return formvalidate();">Post</button>
    </div>
  </div>
</form>

---

Name: rhsnewsletterform —

<form role="form" name="rhsnewsletterform">
  <div class="input-group"> <input type="email" id="rhsnewsemail" name="rhsnewsemail" class="form-control" placeholder="Enter email to subscribe"> <span class="input-group-btn"> <button class="btn" type="submit"
        onclick="return rhsemailvalidate();">SUBMIT</button> </span></div>
</form>

---

Name: formSubsribe — POST

<form class="col-md-10 col-xs-10" name="formSubsribe" method="post">
  <input type="text" placeholder="Mobile" name="mobile" id="mobile" value="" maxlength="10">
  <input type="text" placeholder="Email" name="email" id="email" value="">
  <!--<input type="submit" class="subscribe" value="Insta-Subscribe" id="btn_subscribe" onclick="return validateSubscriptionHome();">-->
  <a href="javascript:void(0);" onclick="validateSubscription();"><img src="https://www.forbesindia.com/images/insta-subscribe.jpg" width="119" height="35" border="0" alt="Forbes India Subscribe" title="Forbes India Subscribe"></a>
  <p class="text-bold">OR</p>
  <p><a href="https://www.forbesindia.com/subscription/" target="_blank">click here</a> to Subscribe Online</p>
</form>

---

Text Content

Sections
   
 * Subscribe
 * Leadership
 * Innovation
 * Billionaires
 * Startups
 * Podcasts
 * Videos
 * Life
 * Cryptocurrency
 * Blogs
 * Lists
 * Thought Leadership
 * Magazine

Lists
 * To The Point
 * Daily Tech Briefing
 * Daily Tech Conversation
 * Money Talks
 * Startup Fridays
 * From the Bookshelves
 * All Podcasts

 * Leadership Mantras
 * Pathbreakers
 * Momentum
 * Nuts and Bolts
 * In Conversation With
 * From the Field
 * Beyond the Boardroom
 * All Videos

 * 2022 India's Top Digital Stars
 * 30 Under 30 2022
 * India's 100 Great People Managers 2021
 * Tycoons of Tomorrow 2021
 * W-Power 2021
 * India Rich List 2021
 * 30 Under 30 2021
 * India's 100 Great People Managers 2020
 * India Rich List 2020
 * Self Made Women 2020
 * 30 Under 30

 * Latest Issue
   

 * Column
 * Special
 * Leaderboard
 * Exit Interview
 * Close Range
 * World Watch
 * Ideas & Opinion
 * Hindsight
 * Briefing
 * Breakpoint
 * Resolution
 * Numerix
 * Greyscale

 * Corporate Account
 * First Principles
 * Global Game
 * Enterprise
 * Special Report

 * Recliner
 * Traveller
 * Health
 * Appraisals
 * F-index
 * Cheat Sheet
 * Tip-Off
 * Nuggets
 * Frequent Flier
 * Style
 * Ex-Libris
 * Special
 * Thoughts
 * Engage
 * Forbes Life
 * Auto

 * Think
 * Live
 * Work
 * Play

 * Business Evangelist of India
 * Education Evangelists of India
 * IIM Kozhikode
 * WeSchool
 * SP Jain School of Global Management
 * Bharatiya Vidya Bhavan's SPJIMR
 * ESMT
 * IESE Business School
 * IIM Bangalore
 * Great Lakes Institute of Management
 * London Business School
 * Kellogg School of Management
 * EDHEC

 * Video
 * Slideshow
   
 * Audio
 * Twinterview


 * Leadership
 * Innovation
 * Billionaires
 * Lists
 * Startups
   
 * Podcasts
   To The Point Daily Tech Briefing Daily Tech Conversation Money Talks Startup
   Fridays From the Bookshelves All Podcasts
 * Videos
   Leadership Mantras Pathbreakers Momentum Nuts and Bolts In Conversation With
   From the Field Beyond the Boardroom All Videos
 * Life
 * Subscribe
 * Log in


To The Point Daily Tech Brief Daily Tech Conversation Money Talks Startup
Fridays From the Bookshelves All Podcasts
Leadership Mantras Pathbreakers Momentum Nuts and Bolts In Conversation With
From the Field Beyond the Boardroom All Videos
 1. Home
 2. UpFront
 3. Take One: Big story of the day
 4. How the Parekhs helped build HDFC Bank into India's second-largest company


HOW THE PAREKHS HELPED BUILD HDFC BANK INTO INDIA'S SECOND-LARGEST COMPANY


HDFC BANK, INDIA'S LARGEST PRIVATE SECTOR LENDER, HAS ANNOUNCED ITS DECISION TO
MERGE WITH HDFC, THE COUNTRY'S FIRST RETAIL HOUSING FINANCE COMPANY, MAKING IT A
BEHEMOTH AND ALSO UNLOCKING CONSUMER POTENTIAL WITH CROSS-SELLING OPPORTUNITIES

By Manu Balachandran, Forbes India Staff
10 min read
Published: Apr 6, 2022 02:18:22 PM IST
Updated: Apr 6, 2022 02:45:29 PM IST
 * 
 * 

Full Bio
 * Full Bio
 * Recent
 * Most Popular

Manu Balachandran is a writer for Forbes India, based in Bengaluru. At Forbes
India, Manu writes on automobiles, aviation, pharmaceuticals, banking,
infrastructure, economy and long profiles among many others. He also moderates
many of Forbes India's CEO and CXO events and hosts Capital Ideas, a podcast on
the most riveting success stories from the business world. He has previously
worked with Quartz, The Economic Times and Business Standard in Mumbai and New
Delhi. Manu has a master's degree in journalism from Cardiff University and a
degree in economics from the Loyola College. When not chasing stories, he is
most likely obsessing over Formula 1 (Read: Lewis Hamilton), historical events
and people, or planning long weekend drives from Bengaluru

 * Maruti Suzuki—the common man's carmaker—might be dead. Long live the new
   Maruti Suzuki
 * How Kolkata's Senco Gold struck gold
 * Why GE's deal with HAL is a game changer for Indian defence
 * From Twitter to Tesla, how Modi's fan Musk is getting ready for big India
   plans
 * IndiGo has beaten Air India to the mother of all aviation deals. Now, the
   rivalry is getting real

 * Bharat Aluminum Company puts safety first
 * China drives into India
 * How the Adani Group became India's largest airport operator
 * How the Marx-loving fluke entrepreneur became India's coffee king
 * Tata Motors 2.0


   
 * 
 * 
 * 
   
   
   
 * 
   

   
 * 

 * 
 * 
 * 
 * 
   
 * 

   
   
 * 
 * 

Headquarters of India's HDFC bank is pictured in Mumbai, India  Image: Shailesh
Andrade/ Reuters
 
Quite often, turning 65 means hanging up one’s boots. But here have been some
notable exceptions, too. Captain CP Krishnan Nair set up the first Leela Hotel
in 1987 when he was 65 and built it into one of India’s best-known luxury hotel
chains. Ashok Soota, the technology veteran, started Happiest minds in 2011 when
he was 68, and is today among India’s richest people with a net worth of $1.2
billion. Although not quite 65, Falguni Nayar founded Nykaa at 49 and turned it
into a beauty and fashion behemoth by the time she is nearly 60.  
 
But long before they all did that, and inspired many others, it was perhaps
Hasmukh Thakordas Parekh, who disregarded conventional norms of his time to
start a venture that has now gone on to rewrite corporate India’s annals. HT
Parekh founded Housing Development Finance Corporation Limited (HDFC), India’s
first retail housing finance company, soon after he had retired as the chairman
of Industrial Credit and Investment Corporation of India (ICICI) at the age of
65.
 


RELATED STORIES

 * THE SCIENCE BEHIND HDFC-HDFC BANK'S MEGA MERGER

 * AXIS BANK TO BUY OUT CITI INDIA'S CONSUMER BANKING BUSINESS FOR $1.6 BLN

 * BANKING: WHAT'S NEXT FOR LOANS?

“At that time, it was akin to a startup,” Deepak Parekh, his nephew and chairman
of HDFC wrote in the book, India Transformed, published by Penguin Books. “The
only difference was that, unlike most startups, which are largely set up by
young entrepreneurs, this one was a post-retirement venture by the founder, HT
Parekh.”
 
On April 4, 45 years since that ambitious leap of faith, HDFC announced that it
will merge with the country’s largest private lender, HDFC Bank, to create a
banking behemoth that will also become the country’s second-largest company. In
sheer size, it will be twice as big as ICICI Bank, India’s third-largest bank.
Soon after the announcement, the market capitalisation of both the companies
zoomed to over Rs 14 lakh crore, about Rs 4 lakh crore less than that of India’s
largest company, Reliance Industries Limited.
 
HDFC, set up in 1977, issues mortgages to more than half of the home buyers in
India. HDFC Bank, which began operations in 1994 as a subsidiary of HDFC, is
currently India’s second-largest bank. Post the merger, HDFC will hold 41
percent of HDFC Bank Ltd. Its shareholders will get 42 shares of HDFC Bank for
every 25 shares of the non-banking financial company (NBFC) held by them. The
deal, which has pending regulatory approvals, is likely to be completed over the
next 12 to 18 months until which both institutions will continue to function as
independent entities.
 
"As the son grows older, he acquires the father's business,” Deepak Parekh, the
chairman of HDFC said at the time of the announcement. “This is a friendly
merger. We won't be thrown out. After 45 years in housing finance, we have to
find a home for ourselves, which we found in our own family company HDFC Bank.”
 
For Parekh too, the announcement is something of a homecoming. He had joined his
uncle, Hasmukh Parekh, at HDFC as a 33-year-old, after a stint with investment
banking. If not for his uncle, who had convinced him to join HDFC, Parekh would
perhaps have been lost to some foreign bank, like many of his peers. At HDFC,
Parekh was instrumental in bringing the company closer to people, particularly
those with housing needs. Since then, HDFC has provided over 9 million home
loans.
 
“No one in India had so far attempted to finance individuals for their housing
needs,” Parekh wrote in the book. “Access to long-term finance was difficult and
no foreclosure norms existed. At that time, most Indians were extremely
debt-averse. HDFC remained the only housing finance player in India till the
late 1980s when insurance companies, public-sector banks, and a few private
players set up housing finance companies. HDFC also promoted four other housing
finance companies. In effect, HDFC created competition for itself.”

Deepak Parekh left his job with chase Manhattan to join HDFC in 1978
Image: Ashesh Shah/The The India Today Group via Getty Images

 





NO REST, NO RETIREMENT

In many ways, the story of HDFC is all about the grit of the Parekhs. The
company began operations in 1977 as a mortgage lender as the brainchild of HT
Parekh. HT, or Hasmukhbhai, as he was commonly known, had graduated with a
bachelor’s degree in banking and finance from London School of Economics. In
1936, he returned to India and began his career with the stockbroking firm
Harkisandass Lukhmidass while also teaching at the St Xavier’s College in Mumbai
for about three years.
 
Over the next two decades, Parekh would go on to work with the brokerage before
leaving in 1956 to join the newly set up development finance institution, ICICI,
as its deputy general manager. ICICI was one of the earliest institutions
sponsored by the World Bank in co-operation with the Government of India and the
US government. In 1972, Parekh grew to become the company’s chairman, a post he
held until 1978.
 
In 1977, Parekh, tired of seeing millions of Indians turning to buy a house only
towards their retirement, after saving up for years, began working on an
institution that would lend towards home loan financing. “Why can’t Indians have
a home of their own with housing finance in the earlier years of their lives?
Why should they have to wait till the end of their working careers?” Parekh is
reported to have asked.
 
That led to the setting up of HDFC without any support from the government. “The
challenge of growing the housing finance business predominantly concerned
raising adequate long-term resources. During the 1980s, HDFC had successfully
tapped long-term international funding from the World Bank (guaranteed by the
Government of India), International Finance Corporation, and the United States
Agency for International Development (USAID) under the housing guarantee
programme,” Parekh writes in India Transformed.
 
In 1978, Parekh’s nephew, Deepak who was working at Chase Manhattan, joined his
uncle on a 50 percent salary cut as a deputy general manager. “The business of
HDFC was a simple one,” Parekh further writes. “Borrowing wholesale funds and
lending them to retail customers at a fixed rate of interest, typically earning
a modest spread of 2 percent.” Forbes India had sought an interaction with
Deepak Parekh but was turned down.
 
In the early 1990s, as India’s economy seemed on the verge of a collapse, and
the global economic crisis caused by the Kuwait war pushed oil prices higher,
leading to a depletion in India’s foreign currency reserves, the central bank
took a decision to raise interest rates, and in the process fight double-digit
inflation rates. “Home loan interest rates had already reached a peak of 18.5
percent per annum,” Parekh wrote about the early days. “HDFC knew that it could
not afford to renege on its home loan commitments. It just had to find new
avenues of raising resources.”
 



BUILDING INDIA’S BEST BANK

That meant, in 1993, as India opened up its banking sector to the private
sector, Parekh and his team were ready to jump into the fray. “There was an
advertisement in newspapers calling for potential applicants,” Parekh wrote.
“This aroused my curiosity and I thought it would be a good idea to apply for a
bank licence.”
 
The rules then stipulated a capital requirement of Rs 100 crore, and it also
took him some serious efforts at convincing the board, before they agreed to
move away from a single product company into newer frontiers, with the idea that
the new business is run by an independent and professional management. The bank
was incorporated in August 1994 as HDFC Bank Limited, and a year later, opened
its first branch in south Mumbai’s Churchgate neighbourhood.
 
“In short, HDFC Bank almost did not happen—but that is history now,” Parekh
writes. “In 1993, there were over 40 aspiring applicants for a banking
licence—some were even fictitious, having sent in their application on a
postcard. The chairman of the committee appointed by the RBI to grant the
licences was SS Marathe, who was also a member on RBI’s board. One of the
conditions stipulated for getting a licence was that the head office of the bank
would have to be in a city other than Mumbai. HDFC took its chances and
requested for the head office to be in Mumbai. To our surprise, it was the first
to receive a bank licence. Marathe mentioned to me that HDFC’s application was
the best and hence we were allowed our preference of having the head office in
Mumbai.”
 
In its early days, HDFC Bank had largely focussed on corporate lending, before
making a shift towards retail customers, and is widely regarded for growing its
net profit by almost 30 percent every quarter for a decade, at a time when
India’s economy was growing at a breakneck period in the 2000s. In 2000, HDFC
Bank merged with Times Bank, and by 2008, the company acquired Mumbai-based
Centurion Bank. For long, it also had a fabled rivalry with ICICI Bank, at a
time when both the banks were vying for similar customers, so much so that about
two decades ago, chaos erupted when one of them set up tents to solicit clients
near an exhibition venue of the other.
 
Since its inception, HDFC Bank has been led by managing director Aditya Puri, a
former CEO of Citibank Malaysia. Today, the bank has a base of 6.8 crore
customers, across 3,000 cities and towns with over 6,300 branches. The bank has
also grown to have total assets of over Rs 19 lakh crore as of December 31,
2021. In 2020, Puri, who had served as the longest-serving CEO of an Indian bank
at HDFC Bank, finally retired, handing over the reins to Sashidhar Jagdishan.
 
“I told Deepak I want a free hand, I want to build an institution, so I will
only come if I have a free hand in running it because then you have fun; if you
believe in the vision, you go on with the vision then it’s great," Puri, who is
credited with building the banking business, told CNBC-TV 18 in 2020. "To his
credit, he (Deepak Parekh) said yes, and I must say if I asked for his help or
used him as a sounding board, he came on board but other than that he never once
interfered."
 
In 2017, India’s central banker, the Reserve Bank of India (RBI) added HDFC Bank
to an elite list of Indian lenders, who were deemed “too big to fail”. Today, it
is one of the three banks that fall in the category apart from State Bank of
India, and ICICI Bank, which means that their failure could be catastrophic for
the country’s financial system and economy.
 
Much of the bank's success came largely due to its focus on retail loans, which
used to constitute some 55 percent of its loan book. Over the past few years,
that had declined to some 47 percent, even as the bank continues to have the
lowest bad-debt ratio. The lender’s retail portfolio includes personal loans,
housing, vehicle, education loans, and credit cards among others.
 
HDFC Bank’s loan book stood at a staggering Rs 12.6 trillion as of December 31,
2021, compared to over Rs 10.82 trillion a year ago while its advances rose by
5.1 percent from Rs 11.98 billion in September 2020 (Q2FY22).
 



DIVERSIFIED EMPIRE

Today, the HDFC Group, of which the bank remains the mainstay, has also built
numerous subsidiaries, including life insurance business HDFC Life, general
insurance business HDFC Ergo, and an education loan business, among others. The
merger, meanwhile, also provides a massive opportunity to unlock potential for
its subsidiary businesses.
 
“The merger would further mitigate single product risk for HDFC Ltd and opens up
avenues for cross-selling to a larger customer base as well as enhance product
diversity while the bank’s exposure to unsecured loans would also reduce,”
Gaurav Jani and Palak Shah, analysts at Prabhudas Liladher, said in a report.
“HDFC would benefit from the lower funding cost of the banks and its large
distribution franchise while HDFC bank would gain from the former’s expertise in
real estate and efficient loan processing. As of now, 70 percent of HDFC Ltd and
its subsidiaries customers do not bank with HDFC Bank which would provide
tremendous cross-sell opportunities to the merged entity.”
 
In addition, the merger will also allow HDFC Bank’s customers to be offered
mortgages as a core product, as the bank looks to build on its housing loan
portfolio. Home loans form only about 6.2 percent of HDFC Bank’s lending book.
“HDFC Bank will enable seamless delivery of home loans and leverage on the large
base of over 68 million customers of HDFC Bank,” Keki Mistry, vice chairman and
CEO, HDFC, told the media.
 
Now, over the next few months, as the regulators scrutinise the deal for
approvals, Parekh and his team at HDFC will be working on the final nuances and
plotting the next phase of growth for the company he had built brick by brick.
With the merger complete, HDFC Ltd will own 41 percent of the HDFC Bank. But, in
the process, with him stepping away from management, as rules stipulate, the
group will be without a Parekh at the helm for the first time.
 
With that, life would have come full circle for the family after nearly five
decades.







Check out our Festive offers upto Rs.1000/- off website prices on subscriptions
+ Gift card worth Rs 500/- from Eatbetterco.com. Click here to know more.

 * 
 * 
   
 * 

 * 
 * 
   
 * 
 * 
   

Get the latest stories, videos, and podcasts from Forbes India directly in your
inbox every Saturday
SUBMIT

Deepak Parekh HT Parekh HDFC HDFC Bank Housing finance ICICI ICICI Bank
Post Your Comment
Name

Required
Email Address

Required, will not be published
Comment

All comments are moderated
Post
Thank you for your comment, we value your opinion and the time you took to write
to us!
 * 
 * 
 * 
 * 
 * 
 * 
   



FORBES INDIA LISTS

prev
next

undefinedundefinedundefinedundefinedundefinedundefinedundefinedu
ndefinedundefinedundefinedundefinedundefinedundefinedundefinedundefinedu
ndefinedundefinedundefinedundefinedundefinedundefinedundefinedundefinedu
ndefinedundefinedundefinedundefinedundefinedundefinedundefinedundefinedu
ndefinedundefinedundefinedundefinedundefinedundefinedundefinedundefinedundefined

Get the latest stories, videos, and podcasts from Forbes India directly in your
inbox every Saturday
SUBMIT

Insta-Subscribe to Forbes India Magazine

For hassle free instant subscription, just give your number and email id and our
customer care agent will get in touch with you

OR

click here to Subscribe Online




POPULAR NOW

 1.  Mark-up and deliver: Why you can't count on online food discounts
 2.  What Aneesh Reddy is getting right about Capillary Technologies' push in
     the US
 3.  Maruti Suzuki—the common man's carmaker—might be dead. Long live the new
     Maruti Suzuki
 4.  Can Vedanta pull off its semiconductor project without Foxconn?
 5.  From Christian Dior to Karl Lagerfeld, five fashion exhibitions to catch
     this summer in the US and Europe
 6.  Why the slowdown is good for India's SaaS companies
 7.  What went wrong at PharmEasy and can it find a cure?
 8.  Meet the youngest women on Forbes' list of America's most successful
     businesswomen
 9.  Larger businesses see value in Zoho for their complex needs: Praval Singh
 10. Ten years and $1 trillion later, has China's Belt and Road Initiative
     reached a dead end?




TWEETS


Photo Of The Day: Ready for feast
You can have Dhoni, Kohli, Rohit's qualities, but try to be true to yourself: KL
Rahul
© COPYRIGHT 2023, FORBESINDIA.COM ALL RIGHTS RESERVED
 * 
 * 
 * 
 * 
 * 
 * 
 * 


LATEST NEWS

 * Let's talk about...The Taylor Swift economy
 * Gastronomic gems of Michelin-starred Indian chefs
 * The long and short of the stock market rally. How far can the bulls run?
 * India has lifted the ban on lithium mining. Why?
 * Despacito—the biggest takeaway from TCS's Q1 earnings results
 * Seven percent Indians stop buying tomatoes due to skyrocketing prices: Report

 * LEADERSHIP
 * INNOVATION
 * BILLIONAIRES
 * LISTS
 * STARTUPS
 * PODCASTS
 * VIDEOS
 * LIFE


CONTACT US ADVERTISE WITH US SUBSCRIBE FORBES INDIA MARQUEE LEADERSHIP AWARDS
PRIVACY POLICY COOKIE POLICY TERMS & CONDITIONS DISCLAIMER


India has lifted the ban on lithium mining. Why?

Despacito—the biggest takeaway from TCS's Q1 earnings results

Seven percent Indians stop buying tomatoes due to skyrocketing prices: Report

The Woman In Me: Britney Spears memoir set for October 24 release

How organisations can implement new protection strategies against increasing
supply chain cyber attacks

Photo of the day: Helping hands

BoConcept has seen 25 percent growth annually in India: Navin Khanna

Apple unveils clean energy initiative in India with impact VC firm Acumen

Morning Buzz: Tesla in talks to manufacture cars in India; retail inflation
jumps to 4.8 percent, and more

Canadian Parliamentary report urges recognition and strategic planning for
blockchain industry

Axelar teams up with Microsoft for hybrid blockchain solutions

Discover 5 of the world's most exclusive secluded luxury resorts

Low input prices may aid margins in Q1FY24 but weak demand still pinching

Gastronomic gems of Michelin-starred Indian chefs

The long and short of the stock market rally. How far can the bulls run?