HDFC’s Incredible Journey: From Rs 85 to Rs 2730

On July 12, Housing Development and Finance Corporation ended its remarkable journey of around 45 years and stopped trading in the Indian markets post the merger with HDFC bank that came into effect on July 1.

Shares of HDFC, India’s first housing finance company, traded for one final time on Wednesday, bringing the curtain down on the index heavyweights over the four-decade journey.

The journey of HDFC Ltd began in 1978 when HDFC went for a Rs 10 Crore IPO with a face value of Rs 100 per share. Furthermore, the shares of the company were undersubscribed during the IPO.

On the listing day, the shares of the company hit the Indian market below its face value of Rs 85 per share. Moreover, HDFC has seen its share price jump from Rs 3 each at the end of FY91 to Rs 2730 on its final day on BSE. This translates to a return of approximately 90,900% in the last 32 years.

If any investor had made an investment of only Rs 1000 in April 1991, the value of that investment would have grown to around Rs 9.10 lakh, reflecting a CAGR of 22.93%.

Similar to its parent company HDFC, which became listed in 1978 and had been a prominent creator of wealth, HDFC Bank also established itself as one of the top wealth generators. Launched on March 14, 1995, HDFC Bank’s IPO of Rs 50 crore was priced at just Rs 10 per share and was oversubscribed by an impressive 53 times.

HDFC, which was founded by H T Parekh, the uncle of Deepak Parekh, was incorporated on October 17, 1977. The company disbursed its first home loan in 1978 to D. B. Remedios in Mumbai. In the beginning, the founding team faced a challenging task. Home loans were not widely sought after at that time, and the HDFC brand was relatively unknown.

After four decades of instrumental contribution in building India’s oldest mortgage lender from the ground up, Deepak Parekh has decided to retire, marking the end of an era. Parekh played a crucial role in shaping the company’s growth and success. With his departure from all roles within the company, a significant chapter comes to a close.

Let’s analyse the share price movement of HDFC and determine the number of days it took for the stock price to double.

Analysing the provided data table, we can draw several conclusions about the stock performance of Titan Company. Firstly, the stock took approximately 758 days, or around two years to reach Rs 200 from its base price of Rs 100. Subsequently, within just two years it achieves the milestone of Rs 400. Remarkably, within just three more years, the stock surpassed Rs 800. Continuing its upward trajectory, the stock doubled again from Rs 800 to Rs 1600 in the next six and half years. Furthermore, the stock reached Rs 3021 its all-time high in the next four years in the year 2021 and it ended its journey at Rs 2730 in the Indian market.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.