When one talks of housing finance, the first name that comes to mind is that of HDFC (Housing development finance corporation), but no one really knows about Gruh Finance. One of the reason for that could be less visibility in cities and also it being a small cap. However, Gruh finance has its own set of customers, and with HDFC promoting it, there's enough funding backing it.
Gruh Finance (GFL), was set up by HDFC to replicate its home financing business model in semi-urban and rural areas. GFL provides long-term finance to individuals for construction, purchase, extension, repair and renovation of homes.
GFL also offers loans for purchase of non-residential properties like office premises and shops. HDFC holds a 61.49% stake in the company. GFL has been a major housing finance company operating in the semi-urban and rural areas of Gujarat, Maharashtra, Rajasthan, Madhya Pradesh, Karnataka, Chhattisgarh and Tamil Nadu. Gruh finance has been able to penetrate in this market, while other major pvt. bankers have not been able to do so.
It has 89 branches – a majority of these in areas where HDFC does not have a presence. The main strategy of the company is to penetrate into places that are avoided by large housing finance companies. Therefore the company has been able to carve its own niche in the housing finance sector.
Even in a difficult quarter, like March 2009, it has posted 53% rise in its operating income and 41% rise in its operating profits over the corresponding year-ago period. Well that's the mark of a company, managed by a very good set of people (in this case its very obvious with HDFC being its parent company).
During the year the Company disbursed Rs 655.52 Crores (Previous Year Rs 632.29 Crores). Loan Assets have increased from Rs 1769.61 Crores as on March 31, 2008 to Rs 2085.61 Crores as on March 31, 2009 registering a growth of 18%. Gruh has continued to focus on the individual loan segment and disbursed Rs 557 Cr to 12,538 families and the cumulative disbursements as on Mar 2009, stand at Rs 3865 Cr.
Although a comparison with HDFC can't be done, but I would still like to compare it on the front of valuation. HDFC trades at a P/E of somewhere around 30, while Gruh trades at 13-14. Now, HDFC commands such valuations on account of its credibility and growth, but if one is to consider Gruh finance, then you automatically get both the traits. HDFC being its promoter lends incredible amount of credibility to the company, and growth is ther for everyone to see.
Gruh Finance (GFL), was set up by HDFC to replicate its home financing business model in semi-urban and rural areas. GFL provides long-term finance to individuals for construction, purchase, extension, repair and renovation of homes.
GFL also offers loans for purchase of non-residential properties like office premises and shops. HDFC holds a 61.49% stake in the company. GFL has been a major housing finance company operating in the semi-urban and rural areas of Gujarat, Maharashtra, Rajasthan, Madhya Pradesh, Karnataka, Chhattisgarh and Tamil Nadu. Gruh finance has been able to penetrate in this market, while other major pvt. bankers have not been able to do so.
It has 89 branches – a majority of these in areas where HDFC does not have a presence. The main strategy of the company is to penetrate into places that are avoided by large housing finance companies. Therefore the company has been able to carve its own niche in the housing finance sector.
Even in a difficult quarter, like March 2009, it has posted 53% rise in its operating income and 41% rise in its operating profits over the corresponding year-ago period. Well that's the mark of a company, managed by a very good set of people (in this case its very obvious with HDFC being its parent company).
During the year the Company disbursed Rs 655.52 Crores (Previous Year Rs 632.29 Crores). Loan Assets have increased from Rs 1769.61 Crores as on March 31, 2008 to Rs 2085.61 Crores as on March 31, 2009 registering a growth of 18%. Gruh has continued to focus on the individual loan segment and disbursed Rs 557 Cr to 12,538 families and the cumulative disbursements as on Mar 2009, stand at Rs 3865 Cr.
Although a comparison with HDFC can't be done, but I would still like to compare it on the front of valuation. HDFC trades at a P/E of somewhere around 30, while Gruh trades at 13-14. Now, HDFC commands such valuations on account of its credibility and growth, but if one is to consider Gruh finance, then you automatically get both the traits. HDFC being its promoter lends incredible amount of credibility to the company, and growth is ther for everyone to see.
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