HDFC Bank’s Aditya Puri to wind up with shares worth Rs 800 cr

HDFC Bank’s Aditya Puri to wind up with shares worth Rs 800 cr

KEY HIGHLIGHTS

  • Worth of shares owned by Puri is greater than market cap of NBFCs resembling Magma Fincorp, Centrum Capital, Capital India Finance
  • Puri is the very best paid CEO in banking trade; his complete remuneration was Rs 18.9 crore in 2019-20
  • Puri will make an exit in October; Sashidhar Jagdishan and Kaizad Barucha are the highest two inner candidates to succeed him
  • Puri had left his job in Citibank Malaysia to begin a greenfield financial institution promoted by mortgage lender HDFC Ltd in early 90s

HDFC Financial institution MD & CEO Aditya Puri, who can be the very best paid banker, will likely be retiring in October this 12 months with shares price Rs 800 crore within the non-public financial institution. These are the shares owned by Puri by means of worker inventory choices over time. The wealth created by Puri is greater than than the market capitalisation of a number of the established NBFCs like Magma Fincorp, Centrum Capital, Capital India Finance, PNB Gilts, Muthoot Capital Providers, 5paisa Capital.

As per the disclosures, there are 77.96 lakh fairness shares excellent within the title of Puri within the financial institution as on March 31, 2020. The worth on the present market worth of Rs 1,028 per share comes out to be Rs 800 crore. Because the financial institution grows additional, Puri will definitely multiply his wealth within the financial institution.

There’s quite a bit to takeaway from 70-year-old Puri’s profession for any company chief – slog it out within the early a part of your profession, construct a sustainable long run enterprise and emerge as a excessive paid CEO. Alongside the best way, you additionally develop your personal wealth within the firm by means of reward and bonuses that come by workers inventory possibility scheme.

Puri left his comfortable job in Citibank Malaysia to go again house to begin a greenfield financial institution promoted by mortgage lender HDFC Ltd in early 90s. Within the subsequent two and a half a long time, Puri scaled up the financial institution organically and turned it right into a revenue making machine with lowest NPAs within the trade.

The efficiency numbers are thoughts boggling. A stability sheet dimension of Rs 15.30 lakh crore, deposits of Rs 11.47 lakh crore, earnings of Rs 26,257 crore and gross NPAs of negligible 1.26 per cent. The financial institution has additionally made its dad or mum HDFC Ltd proud. The market valuation of the financial institution at Rs 5.87 lakh crore is way greater than the market cap of HDFC Ltd at Rs 3.09 lakh crore.

Whereas constructing the financial institution and creating wealth for everybody, Puri additionally emerged as the very best paid banking CEO. His complete remuneration was Rs 18.9 crore in 2019-20. Beneath Puri’s management, the financial institution has additionally remodeled right into a digital financial institution. The digital journey for all banks is a piece in progress, and quite a bit goes to alter within the subsequent 3-5 years.

There are additionally challenges forward for HDFC Financial institution as a result of the brand new CEO has to steer the financial institution by the realities of a post-Covid world. Progress is shrinking and slowing down, incomes are falling and competitors is rising. The brand new chief will face the problem to retain prime expertise within the financial institution  submit Puri’s exit. Puri had nurtured one of the best expertise within the financial institution all these years.

At present, Sashidhar Jagdishan and Kaizad Barucha are amongst the highest two inner candidates to succeed Puri. Barucha, who has the very best board expertise, is the senior most. Jagdishan is a darkish horse to exchange Puri. Sunil Garg from Citibank can be within the fray whereas Bhavesh Zaveri , one other inner candidate has additionally been screened by the six-member succession committee.

Additionally learn: Mukesh Ambani’s RIL set to amass Kishore Biyani-led Future Group

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