Mumbai, Oct. 17: Beating analysts’ projections, Housing Development Finance Corporation (HDFC) today cheered its shareholders with a 1:1 bonus issue, and a 21 per cent increase in first-half net profit at Rs 304.45 crore.
The bonus announcement came on a day the firm completed 25 years in business. “In order to commemorate the occasion of the completion of twenty five years and to fulfil a long-standing request from retail shareholders, the bonus has been offered,” the company said. That failed to impress the market, where the HDFC share lost Rs 14.40 to close at Rs 614.70.
An extraordinary general meeting will be convened soon to seek shareholders’ approval to raise authorised share capital.
The HDFC board that considered the financial numbers for the six months ended September 30 recorded a net profit (before tax) at Rs 375.4 crore, up from Rs 300.01 crore in the same period of the previous year.
After providing Rs 70.95 crore for taxes, (net of deferred tax), profit after tax stood at Rs 304.45 crore compared with Rs 252.55 crore in the corresponding period last year. Total assets rose to Rs 23,908 crore from Rs 19,351 crore in April-September 2001, up 24 per cent.
In a reflection of its expanding business, HDFC’s loans, including outstanding credit, deposits and investments in preference shares and debentures for financing real estate-related projects on September 30, increased to Rs 20,036 crore from Rs 15,972 crore in the same month last year, representing a growth of 25 per cent.
Securitised individual loans added up to Rs 252 crore in September, taking the growth in the loan portfolio to 27 per cent.
Loan approvals in the first six months stood at Rs 5,294.81 crore compared with Rs 4,083.59 crore in the corresponding period last year, representing a growth of 30 per cent. Disbursements at Rs 4,221.83 crore were 32 per cent higher than Rs 3207.57 crore same time last year.
The company that generates almost all its business from home loans said the gross non-performing assets (NPAs) accounted for 1.19 per cent of its portfolio. Provisions have been made for loans difficult to recover, so the net non-performing assets of the corporation will be zero.
While announcing the bonus issue, HDFC chairman Deepak Parekh said it is early days for a buyback, though the board has drawn up a proposal that will come to fruition after the Companies Act is amended.
The buyback norms formulated by the government are basically meant for manufacturing companies. Under the Act, only companies with a debt-equity ratio of 2:1 can go for a buyback; HDFC, a financial institution with a ratio of 7:1, cannot do so in its present form.