GQG Partners acquires shares of IDFC First Bank through block deal

IDFC First Bank on Monday said GQG Partners acquired its 50.7 million shares from Managing Director (MD) and Chief Operating Officer (CEO) V Vaidyanathan via a block deal.

Vaidyanathan will use part of the deal’s proceeds to subscribe to the bank’s fresh shares by exercising stock options. His stake in the bank, which was 0.54 per cent at the end of June, will now go up to 1.23 per cent.

The remaining part will be used for payment of income tax for exercising the stock options and for contributing to specific pre-committed social causes.

“…the bank has been duly informed that the proceeds of the sale net of securities transaction tax and other brokerage charges of Rs 478.7 crore will be utilised 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 bank said in a filing to the exchanges.

The bank said Vaidyanathan would utilise Rs 229 crore as payment to IDFC First Bank to subscribe to new shares, Rs 240.5 crore for payment of income tax for exercising the stock options, and Rs 9.2 crore will be contributed to pre-committed causes.

After the execution of the deal, Vaidyanathan’s stake in the bank would increase to 1.04 per cent from the existing 0.58 per cent as of June 30, 2023. Further, including options yet to be converted, his shareholding will be 1.23 per cent of the total share capital of the bank.

Capital First, which was a non-banking finance company and was merged with the then IDFC Bank, had originally granted CMD stock options to Vaidyanathan.

After the merger of Capital First in December 2018, these stock options were converted to IDFC FIRST Bank stock options. As the options are approaching their expiry, these are being exercised accordingly.

“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,” the bank said.