GQG Partners acquires stake in IDFC First Bank

IDFC First Bank Ltd. | Bank - Private | BFSI | BSE: 539437 | NSE: IDFCFIRSTB

11 Sep 2023 Evaluate

GQG Partners has acquired 5,07,39,653 equity shares of IDFC First Bank from Mr. V. Vaidyanathan, MD & CEO of the Bank in a block trade transaction, and 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.

The background to this transaction is as follows. Capital First had originally granted CMD stock options to Mr. 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. As these options are approaching their expiry, these are being exercised accordingly.

To exercise these options, Mr. Vaidyanathan is required to pay the 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 provides a range of financial solutions to individuals, small businesses and corporates.