GQG Partners acquires over 5 crore shares of IDFC First Bank from CEO V Vaidyanathan

U.S based investor GQG Partners has acquired 5.07 crore shares from IDFC First Bank's CEO V Vaidyanathan via a Rs 479.50 crore block trade transaction.

Out of the Rs 478.7 crore sales proceeds, Rs 229 crore will be used to subscribe for new shares of the bank, Rs 240.5 crore towards income tax payment for exercising the stock options, and Rs 9.2 crore towards contribution to pre-committed causes. The causes include National Association of Blind for skilling and rehabilitation of blind people, as well as contribution to Birla Institute of Technology Scholarship Program where Vaidyanathan studied.

"The bank has been duly informed that the proceeds of the sale net of STT and other brokerage charges of Rs 478.7 crore will be utilized for subscribing to fresh shares of the Bank through exercise of options, for payment of related income tax and for contributing to specific pre-committed social causes," IDFC First Bank said

Following this, the shares of IDFC First Bank rallied on Monday morning and rose nearly 2%. The share price opened at Rs 97.24 per share.

This block trade deal comes, a week after the bank joins the first 10 Valuable Indian Banks after 67% Share Surge in 2023.

Earlier on September 1, GQG Partners picked up 17.1 crore shares or 2.58% stake in the lender for about Rs 1,527 crore. The transaction was done at Rs 89 apiece

Also Read: IDFC First Bank Joins Top 10 Valuable Indian Banks after 67% Share Surge in 2023

Vaidyanathan was granted stock options as part of a merger between Capital First and IDFC Bank in October 2018. As these options are now approaching their expiry, he is exercising them by paying exercise price to the bank.

"Furthermore, Capital First was an entrepreneurial venture and the options have appreciated in value over the years due to progress made by Capital First and IDFC FIRST Bank. Hence, he is also required to pay income tax on the appreciation in the market value of the options over the option grant price, calculated as of the date of the exercise. To finance the same, he has executed the sale of the above-mentioned shares," IDFC First Bank said.

With this transaction, Vaidyanathan's shareholding in IDFC First Bank will increase from 0.58% as of June 30, 2023 to 1.04% of the paid-up capital of the bank. The paid-up capital is the amount of money a company has been paid from shareholders in exchange for shares of its stock.

Further, including options that are yet to be converted, his shareholding is 1.23% of the total share capital of the bank. Vaidyanathan has said that no part of this transaction would be used for any of his personal consumption or for making investments other than in the bank and income tax.

"The payments to the Bank and to income tax mentioned above include payments for recently exercised tranches made by availing loans, which are being repaid with the proceeds of the sale of the said shares. The above exercise of shares includes 16,00,000 options granted by the Bank post-merger," the bank said