Haryana Financial Corporation is a state-owned lender that stopped lending fifteen years ago. Created in 1967 to fund small factories across Haryana, it halted all new loans in May 2010 when banks and non-bank finance companies swamped its territory with cheaper money. Since then, the entire business has been one thing: recovering whatever it can from its old loan book while the State Government, which owns over 97% of the company, winds it down for good. # Business segments A single engine in run-off - loan recovery from a legacy portfolio, with a sidecar of government agency work - while the institution itself is being liquidated. ## 1. Legacy loan recovery: collecting on a closed book **The Corporation no longer lends a rupee; its entire operating reason is chasing old borrowers, selling repossessed factories, and settling bad debts - a workout, not a business.** - **Ceased lending entirely** - HFC stopped sanctioning new loans in May 2010 because it could not compete with banks and NBFCs that had access to cheaper funds, leaving it with a frozen loan book and no fresh business. - **Recovery is the sole activity** - a skeleton staff of 14 people works exclusively on recovering outstanding loans, particularly non-performing assets, with no operational business of any other kind. - **Auctioning repossessed units on instalment** - when the Corporation seizes a defaulting factory, it sells it at auction on a deferred-payment basis: the buyer puts down 25% and the remaining 75% becomes a new loan in the buyer’s name, but if that new loan defaults, HFC repossesses the unit again and keeps every rupee already paid. - **One-time settlements to close files** - the Corporation has periodically offered settlement schemes to NPA borrowers, including two specific policies launched in 2021-22 targeting chronic doubtful accounts and loss accounts, though no settlement policy is currently in force. - **Court cases cloud the outcome** - a number of suits related to pension, staff pay arrears, and borrower disputes remain pending in courts, and management acknowledges these will affect what the Corporation ultimately recovers. ## 2. Government agency work: disbursing subsidies for the state **HFC acts as a payment conduit for the Haryana Government, passing through subsidies and seed money - a clerical function, not a profit centre.** - **Agent for state schemes** - the Corporation disburses subsidies, seed money, and agency loans on behalf of the State Government of Haryana, handling the paperwork and payments without taking any lending risk of its own. - **Joint financing with the state’s industrial arm** - HFC has a joint financing arrangement with Haryana State Industrial and Infrastructure Development Corporation (HSIIDC), as seen in a shared loan case for a Rewari-based enterprise, though this is a legacy arrangement rather than an active pipeline. # Group structure and partners **The State of Haryana owns virtually the entire company and has already set the liquidation machinery in motion, with HSIIDC as the executing arm.** - **97.28% government-owned** - the State Government of Haryana holds the dominant promoter stake, with SIDBI at 2.08%, banks and institutions at 0.10%, and the remaining 0.54% scattered across roughly 1,930 shareholders. - **Winding-up formally underway** - the State Government initiated liquidation through a memo dated 21 August 2019, and a reconstituted winding-up committee chaired by the Managing Director of HSIIDC is now overseeing the disposal of all assets and liabilities, including court cases. - **Debt-free and stripped down** - the Corporation has already repaid its entire SIDBI refinance and all bond series, carries no outstanding borrowings, and operates from a head office in Chandigarh with just two branch offices in Gurgaon and Panipat. - **Board under the SFCs Act** - directors are nominated by the State Government, SIDBI, banks and insurers, with some elected by shareholders and others co-opted, while the Managing Director is appointed directly by the State Government under Section 17 read with Section 10(f) of the SFCs Act, 1951.