Making hay while the sun shines

Keki Mistry cashes in on the strong performance of home loan major HDFC

Keki Mistry, vice chairman and CEO of home loan major Housing Development Finance Corporation (HDFC) has sold 1.15 lakh shares held by him in the open market on March 14. At an average ₹1,416 a share, the sale has fetched Mistry ₹16.3 crore.

Post the sale, Mistry’s stake stands at 0.03% or 4.85 lakh shares. Over the past two months, HDFC’s share price has gone from ₹1,237 to ₹1,451, reflecting gains of 17.3% against 10% during the same period for the benchmark Sensex. HDFC is run by a professional board and does not have any promoter or promoter group holdings. Foreign institutional investors hold a majority with a 76.42% stake.

Housing finance companies have once again caught investors’ fancy with the Modi government promising housing for all by 2022. Given HDFC’s wide reach, it is expected to be one of the key beneficiaries of the housing push. In FY16, HDFC clocked net income of ₹30,905 crore, up 13%, while profits surged 18% to ₹7,093 crore. In the nine months of FY17, net income is up 10% to ₹23,657 crore, while profit has doubled 20% to ₹5,398 crore. Not surprising that the stock has gained 32% in the current fiscal.

As on December 2016, HDFC’s gross non-performing loans stood at 0.8%, while net interest margin, which measures a lender’s profitability, stood at 4%. Net interest income was up 18% YoY at ₹2,575 crore in the December quarter. Interestingly, there has been a flurry of insider selling within the financials space in recent days. For instance, Rajiv Anand, ED and retail banking head at Axis Bank, sold 25,000 shares of Axis Bank worth ₹1.28 crore in the open market on March 10. Shikha Sharma, managing director and CEO of Axis Bank, sold 25,000 shares of Axis Bank worth ₹1.3 crore in the open market on March 17. Anirudh Kamani of ICICI Bank, who heads rural and inclusive banking, has sold 18,000 shares worth ₹50 lakh at ₹283 a share on March 14. Paresh Sukthankar, deputy managing director, HDFC Bank, has sold 21,000 shares worth ₹2.9 crore at ₹1,404 a share between March 10 and March 14.


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