Deepak Parekh, the Chairman of Housing Development Finance Corporation (HDFC), hinted at emerging “inorganic opportunities” for the group’s companies in his letter to shareholders. Parekh wrote, “We are now emerging into a scenario where there may be inorganic opportunities for our group companies.”

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While Parekh did not name any individual company within the bank, it is understood that the group has been eyeing acquisitions in the insurance space for instance. He added that some of the group’s subsidiary companies will need additional capital for their expansion plans. Parekh said that the group had also identified new investment opportunities that will help build the next generation of value creators for HDFC. “To support this, we are putting in place a roadmap for our future capital requirements,” he added.

HDFC’s board recently approved an equity fundraising plan of Rs 14,000 crore for the year, and the group is also looking to raise Rs 1.25 lakh crores in debt.

The veteran banker noted that while HDFC delivered a good performance in FY20, it was by no means an easy year. “Risk averseness in lending heightened, further choking credit where it was needed the most. With our non- individual loans, we consciously took a stance to prioritise asset quality overgrowth” he said.

Parekh said it was their prudent buffer building and abundant caution in lending that has given comfort to their investors. In his letter to the shareholders, he also alluded to the moratorium interest waiver case being heard in the Supreme Court. He said that the RBI has been shouldering a huge burden to maintain financial stability.

“The saga of the highest court of law questioning the RBI on the moratorium was indeed unfortunate. Why should a central bank have to be answerable to a court on basic principles which the financial sector operates on?” Parekh wrote. Rather than getting into legal wrangles, efforts must be channelled towards economic recovery, he added.

To revive the economy, the HDFC Chairman once again batted for a one-time restructuring scheme for the real estate sector. “Allowing the problem to fester, may result in a rise in non-performing loans, which in turn will weaken the overall financial sector,” Parekh warned. He added that even real estate prices have to be realistic to reflect current market realities.

A more level playing field for HFCs and NBFCs, especially with regards to External Commercial Borrowing, facilitation of end-to-end execution of mortgages were among the other measures the banker suggested.