HDFC completes Rs398-cr acquisition of HUL's Lever House in Mumbai
29 Jul 2015
Housing Development Finance Corporation (HDFC) has completed the acquisition of Lever house, the former headquarters of Hindustan Unilever (HUL) - a 153,000-sq ft building in south Mumbai - for Rs398 crore.
HDFC has been occupying the building as a tenant since 2012 even as HUL, which had to shift to the suburbs of Andheri, was looking for a buyer for the building. HDFC had struck a deal with the consumer goods giant to acquire the building.
Lever House is adjacent to HDFC's own headquarters Ramon House in Backbay near Churchgate station. Besides HDFC, its group companies HDFC Ergo General Insurance, HDFC Properties and HDFC Sales occupy the new premises.
The corporation had completed the deal in December 2014 and was waiting for a revision in stamp duty rate which took place this year to complete the deal.
HDFC, India's largest mortgage lender, reported a marginal 1.21-per cent increase in its net profit for the April-June quarter of the current fiscal at Rs1,360.98 crore against a net profit of Rs1,344.66 crore for the year-ago quarter.
However, on a consolidated basis, the net profit increased 17.7 per cent to Rs2,204 crore for the three months ended 30 June 2015, from Rs1,873 crore in the same period last year.
Speaking at the annual general meeting, HDFC chairman Deepak Parekh said the corporation was in discussion with partners to sell its stake in its insurance joint venture to its foreign partner. HDFC has two insurance subsidiaries - HDFC Standard Life Insurance and HDFC Ergo General Insurance.
According to Parekh, the quarterly numbers are not comparable because last year's number included the dividend paid out by HDFC Bank. For FY16, the bank's dividend of Rs350 crore would be received in the second quarter.
Speaking to newspersons, VC & CEO Keki Mistry said that the corporation would be floating bonds worth Rs5,000 crore under a qualified institutional placement. "Along with the debt, there will be warrants which will give the holder an option to convert one warrant into shares at a fixed premium," said Mistry.
He said the capital-raising would happen three years from now as that is when the funds would be required.
On the prospects of an HDFC-HDFC Bank merger, Mistry said, "Ideally, what we would like to say is that HDFC balance sheet was not created out of current and savings account deposits. Our liability was created out of long-term funding. If we were to merge, the new entity would have to create reserves for cash reserve ratio, statutory liquidity ratio and meet priority sector norms. If the existing balance sheets were to be grandfathered and we could do CRR, SLR and priority sector only on new loans, it would be a great thing," said Mistry.
According to Mistry, the demand for housing in India would continue to remain strong because of structural reasons. "The average age at which our borrowers buy a home is between 35 and 38.
With 62 per cent of the country's population below 32, all these people will need to buy a house," said Mistry.
