While Srinivasan sold 55 lakh shares between March 9 and March 13th for Rs35.71 crore, 19.1 lakh shares were sold by him on Tuesday (March 24, 2020) for Rs7.51 crore, fetching an average price of Rs39.30 apiece. The Federal Bank shares closed at Rs37.70 on Tuesday.
In fact, the large sell-off by Srinivasan, who has been at the helm of the lender for about a decade and has earned the bank a certain amount of glamour among its peers, indeed raised some eyebrows in the market initially.
However, a Federal Bank statement has quoted Shyam Srinivasan as saying that he had sold these shares to repay the outstanding principal and interest on the ESOP loans availed by him for the purchase of the vested shares.
“The sale of the shares was triggered as a consequence of the extreme volatility in the market and the resultant margin calls on the loans taken,” Srinivasan was quoted as saying.
He also added that he had now settled the loans availed towards buying the ESOS (employee stock option scheme) shares.
The share price of Federal Bank, the largest bank in Kerala and one of the best performing banks in the country, has suffered more than 56 per cent loss on the stock markets during the past one month alone.
Shyam Srinivasan, who held 48.81 lakh shares at the beginning of 2018-19, increased his holding by 35.28 lakh shares on June 7, 2018, through purchase of ESOs shares to 84.09 lakh, thus taking his holding in the bank to 0.42 per cent.
However, On September 12,2018, he sold two lakh shares taking the holding down to 82.09 lakh shares. Srinivasan used to hold 83.09 lakh shares or 0.41 per cent, in the bank as of 2018-19 end.
If there were no deals that have taken place between FY19 end and during March, 2020, Srinivasan could be currently left with just 7.99 lakh shares of Federal Bank in his name.