HDFC Limited - ESG approach: Hope begins at home; committed to each aspect of ESG - ICICI Securities

We hosted HDFC Ltd (HDFC) at ICICI Securities Virtual ESG Conference '21 on 25th June 2021, wherein the management clearly articulated the company's ESG approach, objectives and initiatives. Key takeaways: 1) Governance practices that meet the highest ethical standards and prudency are key pillars. There are now a number of emerging corporate governance trends that will impact boards over the long run; 2) core business of financing housing sector fulfils social objectives but strives to further deepen the reach by exploring aspirational districts, focused lending to EWS/LIG, facilitate rural housing, offering concessional rate to woman home loan borrower; and 3) remains cognisant of reducing its resource consumption by ensuring better energy-efficiency standards and reducing carbon footprint. Read on for details.

- Social objective - core to its business: Creating a social impact by serving EWS/LIG segment (16% in value and 33% in volume terms lending towards this segment). On disbursements, 48% of disbursements were to first time home buyers in FY21 and 70% (in value terms) included women as owner of the property. It has the largest number of home loan customers - 230k availing benefit under CLSS subsidy scheme. Rural housing loans accounted for ~9% of individual loans disbursed in FY21. Additionally, HDFC is trying to tap micro emerging markets and is exploring aspiration districts for deeper penetration. More than 2% of profits were attributed to CSR activities in FY21 with focus on covid relief, healthcare, education, livelihood, environment sustainability and persons with disabilities.

- Environment initiatives - cognisant of bringing energy efficiency: Two-thirds of the company's lease rental discounting portfolio has been certified as green buildings. It has identified pools of capital exclusively earmarked for lending towards green housing. The company remains cognisant of reducing its resource consumption by ensuring better energy-efficiency standards. It is committed to strengthen and better monitor its carbon footprints in a phased manner.

- Governance - key pillar for Group's standards: Corporation has consistently focused on governance practices that meet the highest ethical standards, prudency and long-term growth irrespective of business cycles. There are now a number of emerging corporate governance trends that will impact boards over the long run. HDFC has 26% women employees and it is committed to gradually increase this ratio. Among new recruits, 34% are women. Also, 20% of its Board directors are women.

Shares of HOUSING DEVELOPMENT FINANCE CORP.LTD. was last trading in BSE at Rs.2507.6 as compared to the previous close of Rs. 2487.3. The total number of shares traded during the day was 67653 in over 3468 trades.

The stock hit an intraday high of Rs. 2514.7 and intraday low of 2483. The net turnover during the day was Rs. 169023363.

Source : Equity Bulls

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