Following the news of the founder equity sale, the stock of PB Fintech dropped more than 6%. PB Fintech Ltd stock dropped following a massive block sale that saw about 64.7 lakh shares traded in a single transaction, according to reports. The identities of the purchasers and vendors remained unknown.
According to media sources, the block trade saw a 1.4 percent stake worth Rs 534 crore changing hands at an average price of Rs 822 per share. On the BSE, the stock was trading at Rs 816, down 6% from its previous finish, while India’s benchmark Sensex was down 1.16 percent at 58,244 points. The co-founders of PB Fintech are selling a 2.4 percent stake in the firm valued at $130-$140 million, according to sources. According to the media report, Dahiya would sell up to 70 lakh shares while Bansal would sell 38.9 lakh shares.
On a fully diluted basis, the founders’ cumulative equity will drop from 10.33 percent to 8.01 percent. In the run-up to the company’s IPO in November 2021, the co-founders and a few other shareholders have lowered the size of their stake selling.
Founders of PB Fintech will sell a $140-million block transaction to lower their ownership
Co-founders of PB Fintech would sell shares comprising 2.4 percent of the business’s capital base in a block sale valued $130 to 140 million, the company stated in an exchange filing. Dahiya will sell up to 70 lakh shares, while Bansal will sell up to 38.9 lakh. On a fully diluted basis, the founders’ cumulative equity will drop from 10.33 percent to 8.01 percent. The contract will be signed on February 11th.
In the run-up to the company’s IPO in November 2021, the co-founders and a few other shareholders lowered the size of their stake sale. According to sources, the founders and other shareholders changed their minds about the size of the stake sale since they believe their company would be worth a lot more after the IPO.
Dahiya presently owns 3.84 percent of the firm, while Bansal owns 1.30 percent, according to statistics on the Bombay Stock Exchange (BSE) website. According to the IPO lock-up period, 43.56 percent of Dahiya’s entire shares are locked-in, whereas none of Bansal’s shares are locked-in.
On the rationale for reducing the stake ahead of the IPO, CEO Dahiya said in an interview after the listing, “A large portion of our stock holdings are in the form of employee stock ownership plans, which are subject to a 43 percent tax each time they come due and must be paid in advance of us selling our shares. There may be some difficulties in doing so. We’ll need money for it.”
Analysts and industry experts, on the other hand, feel that the founders’ reduction in shareholding raises worries about a negative influence on investor sentiment. a researcher, “While the promoters’ intentions are not ill-intentioned, this may dampen investor enthusiasm for the stock. Because the promoters are selling a large number of shares at a time when the price is already sagging.”
Any founder or promoter who sells an interest in the company is a negative. However, they may choose to utilize the funds for personal investments or tax refunds. They may have also pledged their stock and obtained the cash to cover the taxes. The company’s shares were floated for Rs 1,150, about a 23% premium over the issue price. Since its first public offering, the stock has lost 34% of its value.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.
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