HDFC's window at the bourses was the subject of selling by institutions as broad war fears dominated sentiment.

By 14:40 IST, the scrip of the hosing finance major slumped 4.67% to Rs 337.50. Volumes of over 1.49 lakh HDFC shares were notched up on BSE by then. HDFC has now slumped around 14.4% in the last one month from Rs 394.40 on 10 February 2003.

As per market talk, Morgan Stanley is selling on the HDFC counter.

Dealers say, during uncertain times, players shift their focus to defensive sector stocks like HDFC. But this phenomenon is not taking place in the current flopping market as there simply is no confidence in the broad market, as war clouds loom large.

Some hope can be entertained from the fact that long-term conditions may prove good for the stock as the Union Budget 2003-04 has retained all tax benefits for the housing finance sector. Earlier, in its final report on 27 December 2002, the Vijay Kelkar committee had suggested that tax sops for the sector should be continued, albeit in a diluted form. The panel recommended reduction in rebate on interest payment on housing loans from Rs 1,50,000 to Rs 50,000. It also recommended a 2% interest subsidy on housing loans up to Rs 5,00,000. But the Centre rejected the recommendations of the Kelkar committee, continuing with the overall tax exemptions for housing loans.

Analysts are confident that the company will show outstanding growth in the future. They say the company may maintain a growth in the range of 25-35%, but may lose some market share due to tough competition from ICICI Bank, State Bank of India etc.

Earlier, there was talk that HDFC was considering divestment of up to 10% stake held in HDFC Asset Management Company, a subsidiary company.

Recently, HDFC's board of directors approved a proposal to undertake the business of insurance broker and agent and, in this connection, approved the filing of an application to the Insurance Regulatory and Development Authority for obtaining a composite corporate agency licence.

For the third quarter ended 31 December 2002, HDFC registered a 21% rise in net profit to Rs 146.65 crore (Rs 1.46 billion) on a 11% increase in total income to Rs 740.13 crore (Rs 7.4 billion).

BSE code: 500010

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