In October, the shareholders of Capital First Ltd cleared the way for a merger with IDFC Bank, in a deal that stipulates the issue of 139 shares of IDFC per 10 shares of Capital First. After the merger is complete, it has been reported that Rajiv Lall (Managing Director and CEO of IDFC Bank) will assume office as the Non-executive chairman of the combined venture.
Vaidyanathan Vembu, the promoter and chairman of Capital First Ltd, is set to take over as the MD and CEO of the merged entity.
In what appears as a double celebration move over the merger and the upcoming Diwali festival, Mr Vembu has created history of sorts, by gifting 430,000 shares worth over Rs 20 crores among two of his drivers, three maids, and a few colleagues and family members. Every driver and maid has received 6,500 shares – which is way more than what most startups offer as ESOPs to their core employees! It is reported that this giveaway will make each driver and maid richer by Rs 31.1 Lakh at the present value of the company shares.
Satyamurthy Vembu (brother of Vaidyanathan Vembu) is receiving 26,000 shares. Krishnamurthy Vembu (another brother) will receive 13,000 shares. Additionally, 26 former and present colleagues of Vaidyanathan will receive 11,000 shares each (worth Rs 52.64 Lakhs). A cluster of eight more members of the Vembu family are receiving a total of 71,500 shares.
On Friday (November 3) after the market stopped trading, the company’s shares ended at a value of Rs 478.60 each.
Vaidyanathan Vembu personally owns 4.04 million shares, equivalent to a 4.08% stake in the company. Speaking of the giveaway and the recent merger and success of Capital First, he recalled the company’s early days (circa 2010) when the team functioned like a startup, when many of his present-day colleagues left their high-paying jobs in other firms to join Capital First and helped it grow.
“The company is now on the threshold of a merger with an existing bank and it is a significant milestone because of access to a bank platform. Before the start of the new journey, he has expressed a desire to thank and honour those who have bought it to this strong position.” – Statement issued by Capital First Ltd, to security exchanges
The statement also went on to explain that some of Vembu’s closest family members have remained an extensive source of strength and support in his journey, and highlights the giveaway as an opportunity for him to thank them appropriately for their love and support. The transfer of shares that took place to Vembu’s family members, came from his personal stake in the company. He has also ensured that those who received these giveaway shares are not in line to be his heirs or successors within the company. Vembu has asserted that this giveaway is purely for reasons of love, affection and mutual celebration.