HDFC Chairman Deepak Parekh Announces Retirement Ahead Of Merger With HDFC Bank

Having dedicated 46 years to the firm, Parekh had earlier indicated that he would step down from his position on June 30 following the merger of HDFC and HDFC Bank

"We are extremely confident that the runway for housing finance in India will remain immense for several years to come," HDFC Chairman Deepak Parekh wrote in a letter to investors.

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HDFC Chairman Deepak Parekh announced his retirement on Friday in a letter to the company investors, reported CNBC TV18. Having dedicated 46 years to the firm, Parekh had earlier indicated that he would step down from his position on June 30 following the merger of HDFC and HDFC Bank. The board of the HDFC and HDFC Bank was scheduled to conduct a meeting on June 30 to approve the merger. 

"It is my time to hang my boots with both anticipation and hope for the future. 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. The HDFC experience is invaluable. Our history cannot be erased and our legacy will be taken forward," he wrote in the letter, as per the report.  "We are extremely confident that the runway for housing finance in India will remain immense for several years to come," he said

Termed as biggest transaction in the history of India, the merger of HDFC Bank and HDFC was announced on April 4, 2022. The proposed merger between HDFC Bank and Housing Development Finance Corp (HDFC) will create a lender that ranks fourth in equity market capitalization, behind JPMorgan Chase & Co., Industrial and Commercial Bank of China Ltd., and Bank of America Corp., according to data compiled by Bloomberg. It’s valued at about $172 billion. The company will for the first time rank among the world’s most valuable banks after completing a merger.

Once the deal is effective, HDFC Bank will be 100 per cent owned by public shareholders, and existing shareholders of HDFC will own 41 per cent of the bank. Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares they hold.

As chairman of HDFC Ltd, Parekh in the last message to the shareholders said home loans will now be complemented by HDFC Bank’s core strengths, its sales engine, execution capabilities at scale, and deep insights on consumer behavior.

"For HDFC Bank, a home loan customer marks the beginning of a journey of having a customer in perpetuity. HDFC Bank is excited at the prospect of cross-selling an array of asset and liability products to home loan customers. This will be done seamlessly on their digitalisation platforms – all through a one-click experience," he said.

A Look At The Contribution Of Deepak Parekh 

Deepak Parekh, a stalwart in Mumbai's financial world, has left an indelible mark on the institution he dedicated 45 years of his life to - HDFC. Starting his journey under the guidance of his uncle, the legendary HT Parekh, and eventually occupying the coveted corner office, Parekh has been an institution-builder and a trouble-shooter.

Parekh's boundless energy permeated through HDFC during his long tenure, propelling the mortgage giant to achieve a remarkable market capitalisation of over Rs 5 lakh crore, according to a report by Financial Express. The report said Parekh's foresight and business acumen led HDFC to expand into diverse areas, including banking, asset management, and insurance, thereby blazing a trail for the industry.

Convincing the board to venture into new businesses and accept a fresh management structure for the bank was undoubtedly a formidable task, but Parekh's leadership and persuasive skills triumphed, the report said. 

The journey of HDFC transitioning into a bank was one of Parekh's significant achievements, the FE report noted. Through an advertisement, HDFC sought a banking license and emerged victorious, earning the privilege of establishing its headquarters in Mumbai, thanks to its exemplary application.

Former MD and CEO of HDFC Bank, Aditya Puri, often praised Parekh for granting him autonomy while providing support whenever necessary, it further said.  Parekh's remarkable contributions have been recognized through numerous prestigious awards, including the Businessman of the Year in 1996, the JRD Tata Corporate Leadership Award, the Qimpro Platinum Award for Quality, the Corporate Award for Lifetime Achievement, and the esteemed Padma Bhushan.

The Reserve Bank of India appointed Parekh as the chairman of the Advisory Group for Securities Market Regulation, highlighting his deep understanding of market dynamics and regulatory frameworks. Additionally, he served as the chairman of an expert committee established by the Ministry of Power, tasked with spearheading reform efforts in the power sector.