IIFL Ex­ecs’ Share Sale Fu­els Exit Buzz

Bharat Para­jia and H Nemku­mar sold over 12 lakh shares in open mkt on May 20

The Economic Times - - Markets & Finance - PALAK SHAH

Top ex­ec­u­tives of Mum­baibased fi­nan­cial ser­vices firm IIFL are cash­ing in on the sharp run-up in the stock price. Bharat Para­jia and H Nemku­mar – among the four who joined IIFL from CLSA amid much fan­fare in 2007 – to­gether sold over 12 lakh shares in the open mar­ket on May 20. IIFL shares have seen a twofold rise to touch a 52-week high of Rs 121 on May 23 af­ter hit­ting a low of .` 40 seen in Jan­uary 2013. Anirud­dha Dange and Va­sudev Ja­gan­nath were the other two CLSA of­fi­cials who joined IIFL, along with Para­jia and Nemku­mar. In 2007, the quar­tet were of­fered .` 11 crore as a sign-on bonus, apart from 90 lakh pref­er­en­tial eq­uity war­rants at .` 440 per share. But, in 2008, they sur­ren­dered the war­rants and re­placed them with stock op­tions af­ter stock price crashed in 2008, mak­ing it un­vi­able to con­vert the war­rants. Sin­ga­pore-based Para­jia was given 25 lakh shares un­der IIFL’s em­ployee stock op­tion scheme in Jan­uary 2013. The par­tial share sale by Para­jia and Nemku­mar has re­vived talk that the two ex­ec­u­tives may be look­ing to part ways. But IIFL strongly de­nied that ei­ther of them was quit­ting. “The news is ab­so­lutely false,” said IIFL in an email re­sponse. While Para­jia could not be con­tacted, Nemku­mar did not com­ment. A cou­ple of years ago, the mar­ket was agog with spec­u­la­tion of dif­fer­ences be­tween IIFL pro­moter Nir­mal Jain and the four ex­ec­u­tives over the de­pressed IIFL share price. The grapevine had it that Para­jia and his three col­leagues felt that the re­tail broking busi­ness, which had slowed sig­nif­i­cantly be­cause of weak mar­kets, was weigh­ing down the val­u­a­tions of the over­all busi­ness and were said to be de­mand­ing the de­merger of the in­sti­tu­tional broking busi­ness. Jain had de­nied such talk even then. As per the March quar­ter data, Para­jia alone held 5.48% or 1.62 crore shares in IIFL while Nemku­mar owned less than 1%. Para­jia is among the top five share­hold­ers of IIFL.

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