How HDFC overcame the NBFC crisis

July 5, 2019:

Diversified funding, conservative risk appetite & years of experience has helped HDFC come through a challenging period in the last fiscal year, chairman Deepak Parekh said in his annual letter to the company's shareholders.

He was referring to the liquidity challenges faced by NBFCs & housing finance companies in the second half of the last fiscal.

“We held our ground by consciously staying away from funding what we perceived were riskier assets. Unsurprisingly, in the second half of the year, we were asked what we did differently that enabled us to stay resilient & be the preferred choice in the flight to safety.

Perhaps a combination of experience & adhering to our risk appetite held us in good stead,” Parekh told the company’s shareholders in his annual letter.

Parekh said that though the company did make a few wrong calls & underestimated some risks HDFC has tried to err on the side of caution particularly in the non-individual Parekh expressed optimism that the Indian economy will tide over its short term challenges. “Several countries are in the midst of a political storm, while India has voted decisively for stability & continuity. This is a strong mark of confidence & India stands ready to welcome patient capital seeking to earn attractive returns to fund its growth ambitions,” he said.

Source Link