GQG Partners has bought nearly 51 million shares of IDFC First Bank from Managing Director and Chief Executive Officer V Vaidyanathan through a block deal.
Shares of the bank rose around 2% in intra-day trade on Monday following the announcement.
Of the total proceeds, around Rs 229 crore of the proceeds will be utilized to subscribe to new shares of the bank, nearly Rs 241 crore will be utilized for payment to income tax for exercising tax options.
Around Rs 9.2 crore will be utilized for contribution to pre-committed causes like National Association of Blind for skilling and rehabilitation of blind people, contribution to Birla Institute of Technology Scholarship where he studied, and contribution to Rukmini Social Trust, and other such social contributions, the filing said.
Initially, Capital First had granted CMD stock options to Vaidyanathan. When Capital First merged with IDFC Bank in December 2018, these CMD stock options were converted to IDFC First Bank stock options as a part of the amalgamation scheme jointly agreed upon by IDFC Bank and Capital First.
As these options are approaching their expiry, these are being exercised accordingly. To exercise these options, Vaidyanathan is required to pay the exercise price to the bank, the filing said.
The payments to the bank and to income tax 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 1.6 million options granted by the bank after the merger.
Separately, Vaidyanathan had transferred 500,000 shares of his holdings in Capital First or nearly 7 million shares of IDFC FIRST Bank, to a social trust of which, he is a trustee.
The trust currently holds nearly 5.1 million shares of the bank, net of periodic sales used for social contributions.
Including the shares held in the Social Trust, Vaidyanathan’s shareholding will increase to 1.04% of the paid-up capital of the bank from 0.6% as of June 30.
“The Bank has been informed by the MD and CEO that no part of the proceeds will be used for any personal consumption or for making any other investments other than in the Bank, income tax and for the reasons described above,” the filing said.
In July, IDFC merged with IDFC First Bank. Shareholders of IDFC received 155 shares of the bank for every 100 shares held.