Gruh Finance
HDFC’s 59.33% subsidiary Gruh Finance is sure to soar up when it opens for trading on Tuesday. The company has approved a 1:1 bonus, a final dividend of Rs.3/share and its numbers were also good. For Q4FY14, the company’s net profit rose 17% (YoY) at Rs.74 crore on a 24% jump in NII at Rs.106 crore. As a prudential measure, company has, as always, carried excess provision in its books, this time Rs. 19 crore higher than what National Housing Board (NHB) norms stipulate.
And for FY14, it posted a 21% jump in net profit at Rs.177 crore. Its NIM for the year rose 24% at Rs.271 crore. The company has made provisions to the tune of Rs.31 crore for loan portfolio, Rs.12 crore for contingencies and Rs.8 crore for NPA portfolio. Its loan portfolio increased 29% in Fy14, loan disbursements rose 19% and deposit portfolio rose 54%. Its gross NPA stood at 0.27% or Rs.19 crore of total loan outstanding of Rs.7009 crore v/s 0.32% or Rs.18 crore in FY13. Its net NPA remains zero. Capital adequacy ratio (CAR) stood at 16.37% as on 31st March 2014.
The company was originally known as Gujarat Rural Housing Finance Corporation and was set up by H T Parekh, founder of HDFC and uncle of Deepak Parekh. It was set up to provide loans to the economically weaker in the society. Financing homes in rural areas with a population of around 50,000 accounts for 48% of Gruh’s business while rest comes from financing homes in urban towns. This is one sector, low-income financing which is seeing intense competition but Gruh is much ahead of the race and like HDFC has carved a name for itself.