HDFC Bank

Meeting the booming demand for housing loans in India.

Based in Mumbai, Housing Development Finance Corporation Ltd (HDFC) provides housing finance loans to customers in India, Kuwait, Singapore, Oman, the UAE and the UK.

Why do we own it?

India’s retail mortgage market is booming as demand is driven by improved affordability. This comes from rising income levels, relatively low-interest rates, fiscal incentives and falling property prices. This should be a long-term trend given low penetration rates and favourable demographics (over 60 per cent of the population are under 65). HDFC’s main competitive strength is that it’s the low-cost provider of mortgages which is a significant advantage in a commodity industry. It also has an excellent long-term credit record.

Who is key?

HDFC’s management is impressive, with strong links to government figures. The average tenure of senior management is around 25 years.

 

First bought

November 2004

In India, housing ownership is low. Mortgage debt is a small percentage of GDP compared to more ‘developed’ markets.

 

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Image Credit - © Shutterstock / Amit kg

A branch of HDFC Bank sitting in the side of a green valley.

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