“It is my time to hang my boots with both anticipation and hope for the future,’’ Parekh wrote to HDFC shareholders for the last time as chairman. ``While this will be my last communication to shareholders of HDFC, rest assured we now stride tall into a very exciting future of growth and prosperity.’’
HDFC will merge into HDFC Bank tomorrow.
Parekh has been among the most prominent of men in Indian finance for nearly four decades, helping millions of ordinary citizens step on to the property-ownership ladder for the first time by expanding the narrow bailiwick of the financier founded in the licence-raj era by his uncle. But mortgage wasn’t his sole remit: Over the decades, he helmed the journey of Indian finance into adulthood – and global relevance.
HDFC as an institution stepped in with capital for a bank, an insurance company, and a mutual fund when capital in the country was scarce and private business houses were reluctant to invest due to their long payback periods.
Mirrors India's March
“The transformation of the HDFC brand is truly a transformation of the Indian financial sector and Mr. Parekh led it from the front,’’ said Uday Kotak, managing director, Kotak Mahindra Bank. ``Trust is the bedrock of any financial institution and Parekh always nurtured it.’’
For HDFC under Parekh, while growing business was paramount, governance standards were at the core of these institutions when regulators were still grappling with how to make corporates comply with new sets of rules that would be palatable for retail investors.
"Governance has been the cornerstone of HDFC,’’ wrote Parekh.
In his long career, Parekh sowed the seeds of some companies that have become leaders in their industry - HDFC Mutual Fund, HDFC Life Insurance, and HDFC Ergo, a general insurance company.
Despite his origins in the seemingly staid mortgage business, he led HDFC into other segments such as private equity investments into real estate, an industry notorious for its sharp practices, and education loans.
He was the first port of call for regulators and administration whenever institutions got embroiled in controversies or were facing governance issues that threatened their very survival.
Delhi's Crisis Manager
“He has always been accessible and open to finding solutions to knotty problems,’’ says Kotak, himself known as Asia’s richest banker.
When Satyam Computer was foundering because of misgovernance by its founder Ramalinga Raju, the Centre appointed a committee with Parekh to save not only the institution but also ensure India’s unchallenged status as a global hub of technology that now makes up about a tenth of the country’s gross domestic product (GDP).
In a swift move, Parekh along with two others, managed to run a process and sold it to a firm run by Anand Mahindra, which now stands as Tech Mahindra Ltd.
Parekh has been a member of more than 40 committees including the Pherwani Committee on setting up the National Stock Exchange and the Narasimham Committee on banking sector reforms.
When the Unit Trust of India ran into trouble with its then flagship scheme Units – 64, Parekh was relied upon to find a solution that ultimately led to splitting it into two.
Parekh’s management style of trust and freedom was essential in building the institutions under the HDFC brand name.
From a market capitalization of less than Rs. 500 crore for a circumspect mortgage firm in the 1980s, the HDFC and HDFC Bank merger will create the world's fourth biggest bank by market value - behind JPMorgan, ICBC of China and Bank of America, Bloomberg calculations showed. The combined market cap of all HDFC listed entities is now Rs 16.63 lakh crore – or about $200 billion.
'Space & Trust'
“Parekh gave space to professionals like Aditya Puri to flourish,’’ says Kotak. ``And symbolically, in HDFC Bank, the parent is finding a home in its own child.’’
The HDFC group companies flourished under Parekh's leadership. But companies such as Infrastructure Leasing & Financial Services (IL&FS) and the Infrastructure Development Finance Co (IDFC), where he had an advisory role during establishment but did not have direct leadership, tripped up later for having failed to harness Parekh’s active mentorship that otherwise guided several other companies and industries to safety through inevitable business cycles.
What does Parekh want the banking giant to be?
“As HDFC hands the baton, my wish is that our core founding values of kindness, fairness, efficiency and effectiveness get woven deeper into the fabric of the HDFC Group,’’ Parekh signed off.
Deepak Parekh signs off: Looking back at an industry icon's extraordinary career - Economic Times
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