Puri, who quit his job as head of Citibank Malaysia to launch HDFC Bank in 1994, has created the country\u2019s second-largest lender and most valuable bank with a market cap of about Rs 6 lakh crore. Under his leadership, the bank has given 20% growth with a consistency that analysts began to describe as \u201cboring\u201d. The bank is now the third most valued listed entity in India, behind Reliance Industries (Rs 14 lakh crore) and TCS (Rs 8 lakh crore).
Puri had 0.14% of the bank\u2019s equity. After the offloading, which was equivalent to 0.13%, he is left with 0.01% stake, currently worth Rs 43 crore (about 3.8 lakh shares), according to BSE disclosure. <\/p>\n
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<\/div>\n<\/div>\nAccording to the bank\u2019s filing with the BSE so far this month, 39 of HDFC Bank\u2019s executives who are designated \u2018insiders\u2019 under Sebi rules, have sold the bank\u2019s shares aggregating Rs 884 crore. This includes sales by Puri and Ashok Khanna, who recently quit as the head of the lender\u2019s auto loan business.
Market analysts and fund managers around the world usually keep a close watch on insider transactions, for a cue about the future course of the business of the entity and its stock price. Generally, it is believed that insider selling indicates a likely slide in the stock price while insider buying points to a spurt in stock price. From falling to a year-low level of Rs 739 on March 23, so far HDFC Bank\u2019s stock price has rallied 53% to its current close at Rs 1,131 on the BSE.
On Sunday, HDFC Bank said that the shares that Puri sold were allotted to him \u201cat different times and at different price points\u201d and were not allotted at par. \u201cTherefore, the net amount realized by Puri is not Rs 843 crore as stated. The acquisition cost of shares and the tax payable on the transaction has to be accounted for,\u201d it said.
After being set up in mid-1994, HDFC Bank went public in 1996. In the last 20 years, for which data is available, the bank\u2019s market cap has grown from about Rs 5,400 crore at the start of the millennium to its current level of above Rs 6 lakh crore: That\u2019s a growth of over 112 times in two decades. Seen another way, an investment of Rs 1 lakh in the bank\u2019s shares on January 1, 2000, would be worth a little over Rs 1 crore now. In addition, the bank has also paid dividends over this period, which is outside of the stock return. <\/div>\n