HDFC Bank chief executive and managing director Aditya Puri has sold more than 74 lakh shares of the private lender to raise Rs 842.87 crore, according to regulatory filings. The share sale, which was executed between July 21 and 23, brought down Puri's holding in the most valued Indian lender to just 0.01 per cent from the earlier 0.14 per cent.
The sale comes months ahead of Puri's retirement from the bank, which he led to become the largest by assets among private lenders and the second-largest overall over 25 years. He sold 74.20 lakh of the 77.96 lakh shares in the bank and Puri's remaining holding of the bank shares is now 3.76 lakh shares valued at over Rs 42 crore as of the last close.
A bank spokesperson explained that the shares were allotted to Puri over a period of time at different price points and stressed that they were not given at par with the face value of the share. "The net value realized by Puri is not as stated. The acquisition cost of shares and the tax payable on the transaction has to be accounted for as well," he added.
Puri had emerged as the highest-paid Indian banker in FY2019-20 with a 20 per cent growth in gross earnings at Rs 18.92 crore. He had also earned an additional Rs 161.56 crore in FY2019-20 and Rs 42.20 crore in FY2019 by exercising his stock options, as per the bank's earlier disclosures. HDFC Bank shares have gained 46 per cent since touching its 2020 low of Rs 765 apiece on March 24, amid a massive sell-off in equities due to fears over the COVID-19 pandemic. The scrip closed at 1,118.80 on the BSE on Friday.
Puri was reportedly granted 6.82 lakh shares under the Employee Stock Ownership Plan (ESOPs) in FY2020 and had also sold shares worth Rs 200 crore in the bank's subsidiary HDB Financial Services in FY2020. His term is set to end in October when he attains the age of 70 and he will be second chief executive after Indusind Bank's Romesh Sobti to retire this year.
Speaking at a bank annual general meeting earlier this month, Puri had said his preferred successor has been with the bank for over 25 years and it is up to the Reserve Bank now to confirm the name. After undertaking a search for his successor, which included appointing an external headhunter, HDFC Bank board had earlier this year decided on the possible successors and submitted their names to RBI in preference of their choice.
According to reports, bank's change agent Sashidhar Jagdishan and head of wholesale banking Kaizad Bharucha are among the chosen internal candidates, while Sunil Garg of Citibank is among the three external candidates selected by the board.