MUMBAI: IDFC First Bank Ltd managing director (MD) and chief executive officer (CEO) V Vaidyanathan sold 2.75 crore shares for about 58 crore on Thursday and intended to sell additional shares worth 35 on Friday to close employee stock option plan (ESOP) loan availed by him, the private lender informed the stock exchanges on Friday.

Vaidyanathan’s move comes at a time when Indian and global equities face massive sell-off stemming from the fear of the impact of the coronavirus outbreak on economic activity.

An ESOP refers to an employee benefit plan, which offers employees an ownership interest in the organisation.

According to Vaidyanathan, the share price of IDFC First Bank has fallen due to COVID-19-related developments that affected stocks of all sectors including that of banks. This resulted in margin call, prompting the CEO to sell his shares and square the ESOP loans.

If the sale of shares worth 35 core took place on Friday, Vaidyanathan’s loans against shares of the bank will be nil, and barring a home loan, he will have no debt on him, he said.

“I would like to inform that I sold 2,75,58,412 shares yesterday (Thursday) to close the ESOP loan availed by me to acquire the shares and I intend to sell about 35 crore worth of stocks today (Friday) to entirely repay the residual ESOP loan taken for exercising my ESOP shares and to release the pledged shares,” Vaidyanathan said in a statement to stock exchanges on Friday.

“I would like to clarify that I still hold 4,23,47,144 shares (0.88%) after yesterday’s sale,” he added.

However, he expressed his deep regret on sale of shares at the growth stage of the bank “given the wonderful prospects, but I had to do the same to square the ESOP loan”.

“I believe there will be no need for me to sell any more shares in the foreseeable future,” he said. After this sale, he will hold approximately 13 crore stock and options in the bank. As of December 2019, Vaidyanathan held 1.04% stake in IDFC First Bank.

Following the sale, the stock of the bank hit a record low of 18.60 on Friday, closing at 20.60, down 0.24% from the previous close.

“We are building a wonderful bank with strong trajectory of growth of branches, strong growth in retail loans, sharp improvement in CASA, with low NPA and high capital adequacy. All our trajectory strongly positive across all parameters,” Vaidyanathan said.

In the December quarter, the bank reported a net loss of 1,639 crore.

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