Asian Cover -- Financiers
INDIA'S DEEPAK PAREKH (int'l edition)
Deepak S. Parekh dismisses all suggestions that he is an important man--despite evidence to the contrary. Those who know Parekh immediately recognized his hand behind recent key moves by India's ruling Bharatiya Janata Party. Its push for urban land reform, its opening of housing development and port projects to foreign investors, and its go-ahead for private insurers to compete in India were clearly the recommendations of the chairman of India's leading home mortgage company, Housing Development Finance Corp. (HDFC).
Parekh's powers of persuasion, market savvy, and stellar track record have catapulted him into a preeminent position in the struggle to liberalize India. It starts with what he has done with HDFC over the past 20 years, including creating and expanding India's home mortgage market, earning the gratitude of more than 1 million middle-class homeowners. HDFC is now a financial conglomerate with assets of $2.5 billion, and its annual earnings are rising at double-digit rates.
True, the company's Bombay-traded stock has drooped since the recent nuclear tests rocked investors. But the shares are still a pick among analysts, who see the company as one of the best equities to hold during the crisis.LIKE FANNIE MAE. HDFC's success so impressed Indian administrators that they decided to conscript the 53-year-old Parekh. Last year, he was named chairman of the new Infrastructure Development Finance Co. The quasi-governmental credit agency will help finance India's massive need for modern roads, phone systems, and other infrastructure. It draws on Fannie Mae in the U.S. for inspiration. Parekh's push for land reform, critical for growth, aims to end 50 years of government neglect. "The government had other priorities," he says.
Now, he intends to change that with the new agency, which Parekh is overseeing without collecting any salary or fee. His payoff, he says, will come from seeing India prosper.
Finance is in Parekh's genes. His grandfather, father, and uncle all were bankers in India. After studying accounting in Britain, he worked for Grindlay's and later Chase Manhattan Bank in India and Hong Kong. But too many transfers left the Rangoon-born Parekh longing for a stable job in India. His uncle, H.D. Parekh, had started HDFC in 1977 with the help of local financial institutions, the International Finance Corp., and the Aga Khan Foundation. He asked his nephew to join him. Parekh accepted, and in 1978 became part of the original management team, almost all of whom are still at HDFC. The company flourished, partly because Parekh recognized how scrupulous ordinary Indians are about paying off their debts.
Parekh's modest ways, popularity with co-workers, and long hours won him the chief executive's job in 1985. The shirt-sleeved chairman often answers colleagues' unattended telephones if he is passing by--and takes diligent messages. And the man who helps house millions owns only one home himself--a 1,500-square-foot apartment in Bombay that he inherited from his father.
Within India's business community, Parekh is known as a pragmatic leader and astute politician. "Deepak is excellent at maintaining relationships, be it with government, clients, or his staff," says K.V. Kamath, chairman of ICICI, India's leading financial institution. Despite his punishing schedule, Parekh plays bridge on weekends, putting in up to eight hours at cards with his old school buddies.
As part of Parekh's drive to increase home ownership, HDFC has provided the seed money for the five of the major home financing companies in the nation. In other moves, he set up a consumer finance venture with General Electric Capital Corp. and opened a retail bank with National Westminster Bank of Britain. Possible new ventures include mutual funds, asset management, real estate development, and entering the recently liberalized insurance business.
Parekh, who was on the government committee that drafted guidelines for opening up the insurance industry, believes the way to get things done in India is to have "tremendous patience and persuasive power." Judging by his achievements, Parekh certainly has plenty of both.