While the regulatory approvals for the merger of Housing Development Finance Corporation Ltd (HDFC) and HDFC Bank are awaited, HDFC Chairman Deepak Parekh on Tuesday stated that the help and belief of the shareholders is required “more than ever before”.
“My only ask of our stakeholders is for your patience as we navigate through the complexities of this transaction. More than ever before, we need your trust and support,” Parekh stated in a letter to the shareholders of HDFC throughout its forty fifth Annual General Meeting.
Stressing that belief is the inspiration of a profitable merger, monetary and human capital together with a correct communication technique is vital, he stated.
“Fortunately, between HDFC and HDFC Bank, there is a natural affinity…It remains our every endeavour to be available and accessible to all our stakeholders to assuage concerns in an open and transparent manner,” Parekh stated.
The proposed merger is awaiting regulatory approval at this stage. Other than the Reserve Bank of India (RBI), the merger should be permitted by Securities and Exchange Board of India, National Housing Board, Competition Commission of India (CCI), Insurance Regulatory and Development Authority of India (IRDAI), Pension Fund Regulatory and Development Authority (PFRDA) and National Company Law Tribunal (NCLT).
“We remain respectful of all our regulators and are confident that the outcome will be judicious and fair at a systemic level,” Parekh stated.
The merger will improve the lending capability of the group and can be anticipated to decrease prices.
“We have at length, already articulated the rationale for the proposed merger, which takes cognisance of the future growth potential of the country, the evolving macro environment and changes in the regulatory architecture,” he stated.
HDFC Group in April had introduced merger of HDFC into HDFC Bank, together with two different entities HDFC Investments Ltd and HDFC Holdings Ltd. As per the scheme, HDFC Investments and HDFC Holdings might be first merged into HDFC, following which a merger of HDFC will happen into HDFC Bank.
On progress in demand for house loans within the nation, Parekh stays optimistic regardless of the current international headwinds. Rising revenue ranges, improved affordability and financial help augurs effectively for the demand for houses. Real property sector in India is on an upcycle and builders at the moment are financially stronger and extra disciplined, he added.
Parekh estimates the house mortgage market in India at round $300 billion, which is more likely to double within the subsequent 5 years. Even if the demand for house loans doubles, the mortgage penetration will stay on the low at 13% of the gross home merchandise (GDP) in comparison with 20 to 30% of different Asian economies.
“This implies that housing loans in India will have an exponential growth trajectory for decades to come,” he stated.
Source: www.financialexpress.com”