Multibagger private bank stock: GQG Partners acquisition news ignites conversation; know more here!

The stock has given multibagger returns of over 210 per cent in the last 3 years.

In this optimistic market sentiment, the shares of IDFC First Bank Limited zoomed by 1.20 per cent. The share price of IDFC First Bank rose nearly 2 per cent following the block deal news. The company's current market capitalisation is Rs 64,253.18 crore. 

In a significant development, GQG Partners a US-based investment firm, has acquired about 5.1 crore equity shares of IDFC First Bank Ltd's MD and CEO, V. Vaidyanathan, in a Rs 479.50 crore block deal transaction.

The private banking company stated that the net proceeds of the sale of Rs 478.7 crore will be used to subscribe for new shares of the bank through the exercise of options, to pay associated income tax, and to make contributions to specific pre-committed social causes.

Here is how the proceeds will be utilized:

• Subscribing to fresh shares of the bank through the exercise of options: Vaidyanathan will use Rs 229 crore of the proceeds to subscribe to new shares of the bank through the exercise of options. This will increase his stake in the bank from 0.58 per cent to 1.04 per cent.
• Payment of related income tax on the appreciation in the market value of the options held by Vaidyanathan: Vaidyanathan will use Rs 240.5 crore of the proceeds to pay the income tax that is due on the appreciation in the market value of the options that he holds.
• Contributing to specific pre-committed social causes: Vaidyanathan will use Rs 9.2 crore of the proceeds to contribute to specific pre-committed social causes, such as the National Association of Blind, the Birla Institute of Technology Scholarship Program, and the Rukmini Social Trust.

The MD and CEO also disclosed to the bank that no portion of the proceeds will be used for any personal expenses or other investments.

This is a significant development for IDFC First Bank. The acquisition of shares by GQG Partners is a vote of confidence in the bank and its management. The proceeds from the sale of shares will be used to strengthen the bank's capital base and support its growth plans. The contribution to social causes is also a positive development, as it shows that Vaidyanathan is committed to giving back to the community.

IDFC First Bank is primarily involved in providing banking services. The bank came into existence through the merger of the former IDFC Bank and Capital First on December 18, 2018.

The stock has given multibagger returns of over 210 per cent in the last 3 years.

Disclaimer: The article is for informational purposes only and not investment advice.