- By Priyanka Payal
- Mon, 11 Sep 2023 02:37 PM (IST)
- Source:JND
IDFC First Bank shares traded in the green on Monday (September 11) after the US investment firm GQG Partners acquired 5, 07,39, 653 equity shares of the Bank in a Rs 479.50- Crore block deal transaction. The investment firm has acquired these shares from V Vaidyanathan, MD and CEO of the Bank in a block trade transaction. Today, the share price of IDFC Bank was up 1.21% at Rs 96.50 per share at 1:40 pm IST.
According to the Bank, 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.
Capital First had originally granted CMD stock options to Vaidyanathan. Capital First merged with IDFC Bank in December 2018, and as part of the Amalgamation scheme jointly agreed upon by IDFC Bank and Capital First, these Capital First CMD stock options were converted to IDFC FIRST Bank stock options. Since options are approaching their expiry, these are being exercised accordingly, said the Bank.
According to the exchange filing, “Vaidyanathan is required to pay the exercise price to the Bank to exercise these options. Furthermore, Capital First was an entrepreneurial venture and the options have appreciated in value over the years in view of the 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.”
Vaidyanathan had earlier transferred 5,00,000 shares of his holdings in Capital First equivalent of 69,50,000 shares of IDFC FIRST Bank, to a Social Trust of which he is a Trustee. The Trust currently holds 50,93,860 shares of the Bank, net of periodic sales used for social contributions.
Including the shares held in the above-mentioned Social Trust, Vaidyanathan’s shareholding in IDFC FIRST Bank will rise from 0.58% as of June 30, 2023, to 1.04% of the paid-up capital of the Bank because of this transaction. Further, including options yet to be converted, his shareholding is 1.23% of the total share capital of the Bank.
Out of the total Rs 478.7 crore sales proceeds, Rs 229 crore would be paid to IDFC First Bank to subscribe to 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 including, National Association of Blind for skilling and rehabilitation of blind people, Contribution to Birla Institute of Technology Scholarship Program where he studied, Contribution to Rukmini Social Trust, and other such social contributions.
