IIFL executives Bharat Parajia, H Nemkumar sell shares, fuels exit buzz

MUMBAI: Top executives of Mumbai-based 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 Rs 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 Rs 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 Rs 11 crore as a sign-on bonus, apart from 90 lakh preferential equity warrants at Rs 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.