HDFC RED, HDFC Realty up for sale? Here's all you need to know

Murmurs of online classifieds firm Quikr buying HDFC Realty and HDFC RED are rife. Here's what you need to know about HDFC RED, a small company that believes in clutter-free design, and revenues sans ads.

1.    HDFC RED, a digital real estate search platform, was founded in 2010. It's a wholly owned subsidiary of HDFC Ltd., started with the idea of hooking the loan-seeker early in his buying cycle.

2.    HDFC has thus far invested about Rs 30 crore in the subsidiary.

3.    The company is spearheaded by Sohel I. S. The 40-year old CEO earlier worked in the bank's Treasury and Corporate Planning, Credit Risk and Operations. He has been more measured in driving growth compared to his competition, stayed focussed on the primary residential market as opposed to the secondary and rental markets. And, he always said 'No' to discounting when the company's revenue model revolved around advertising.  

4.    HDFC RED today has 4300 developers and 9000 projects listed. It lists properties from 23 Indian cities.  

5.     HDFC RED clocked revenues of Rs 6 crore in two consecutive years - the year ending March 2016 and March 2017. Mid-2016, the company flipped from an advertising-led model as it was being "unfair to home buyers who did not want to be bombarded with ads". The revenue model now is predominantly a leads-based one. The company has also started a services business for builders three months ago - HDFC RED helps builders market their properties on third-party sites and also builds apps, which can be used as sales tools by builders. The idea: Leads business will get scalability while the services arm will generate bulk money. The company is expecting far higher topline in FY18.

6.    For the leads business, the company has a 'pre-park' model. Just like a wallet, builders pre-park money with the company which gets deducted when leads are generated and shared. Recovering money in a post-paid scenario can be quite tricky in the realty business.

7.    If HDFC Ltd. is indeed looking to sell, has the company lost interest in its subsidiary or its value? The answer: The company's management insists that is not the case, but we don't know.