HDFC keen to enter property MF

By Our Special Correspondent

CHENNAI, DEC. 14. The HDFC group is not interested in acquiring any old private sector bank, declared Mr. Deepak Parekh, its chairman.

Addressing a press conference immediately after opening the Anna Nagar branch of HDFC here today, Mr. Parekh said, ``the price expectations of the promoters of these banks are extremely high.'' He did admit that these banks would be under tremendous pressure in the days to come as competition from the new generation banks and lately aggressive old public sector banks hot up. Nevertheless, he said, these banks could pose enormous integration problems if acquired. ``We are still grappling with integration problem in the Times Bank merger with us,'' he pointed out.

Though he ruled out any bank acquisition `at the moment', he, nonetheless, dropped enough hints to suggest that the group would not be disinclined to ``look at some new private sector banks.'' Mr. Parekh, however, hastened to add that ``we are not in any negotiation with anybody.''

Quizzed if he, as a banker, felt the ICICI Bank had yielded lot of grounds to Bank of Madura in the merger exercise, Mr. Parekh merely said a fair swap ratio was indeed the key to the success or otherwise of any amalgamation. ``In the case of Times Bank merger with us, we went by the market value and not the book value,'' he said.

Fielding an assortment of questions, Mr. Parekh said the group was keen to get into real estate-linked mutual fund. In this context, he informed presspersons that the Securities and Exchange Board of India (SEBI) had already asked AMFI (Association of Mutual Fund Industries) to give a report on property mutual fund. As indicated earlier, the HDFC group would let Standard Life Assurance Company of the U.K. to pick up 26 per cent stake in the group's mutual fund arm. Standard Life has a 10 per cent stake in HDFC and five per cent control in HDFC Bank. Mr. Parekh also indicated that the newly-floated insurance joint venture of the group would open an office in Chennai before the first quarter of next year.

Dwelling on the group's joint venture with Tata Consultancy Services (TCS) to set up IT (information technology)-enabled back office operations, Mr. Parekh said the 50:50 outfit was looking at a suitable space to locate its second facility down South.

With business getting competitive, ``We have decided to move towards market and people,'' he said justifying the opening of the Anna Nagar branch of HDFC. This will be the fourth HDFC branch in the city. It has in all 11 branches in Tamil Nadu and is proposing to open two more - one each at Nagerkoil and Hosur, soon.

To a query, he said since the housing finance market was growing, the group could grow organically in this area. Further, inorganic growth via takeovers could pose integration problem. ``There can never be a 100 per cent due diligence in these cases,'' he said. Mr. Parekh said ten per cent of the total housing loan sanctions by HDFC went to Tamil Nadu.

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