IDFC First Bank managing director and CEO V Vaidyanathan raises his stake in the private lender even as US-based investment firm GQG Partners acquires 50.7 million shares from him for Rs 478.7 crore via a block deal.

Out of the deal’s proceeds, Vaidyanathan will pay IDFC First Bank Rs 229 crore to subscribe to the lender’s fresh shares through the exercise of stock options. As a result, his stake in the bank will increase to 1.23% from 0.58% which he held at the end of June.

Vaidyanathan will pay another Rs 240.5 crore to the income tax for exercising the stock options.

The IDFC First Bank chief will also pay Rs 9.2 crore as contribution to specific pre-committed social 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.

IDFC First Bank said Vaidyanathan had earlier transferred 5 lakh shares of his holdings in Capital First, which is equivalent to 69.5 lakh shares of the lender, to a social trust of which he is a trustee.

The trust holds 50,93,860 shares (0.07%) of the bank, net of periodic sales used for social contributions.

It disclosed that including the shares held in this trust, Vaidyanathan’s shareholding in the bank will increase from 0.58% as of 30 June 2023, to 1.04% of the bank’s paid-up capital.

The lender said Vaidyanathan will exercise stock options that are approaching their expiry period.

The bank’s CEO, in his personal capacity, is required to pay the exercise price to the lender for the options.

Vaidyanathan is 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.