This Insider Has Just Sold Shares In HDFC Bank Limited (NSE:HDFCBANK)

By
Simply Wall St
Published
May 13, 2022
NSEI:HDFCBANK
Source: Shutterstock

Some HDFC Bank Limited (NSE:HDFCBANK) shareholders may be a little concerned to see that insider Arvind Kapil recently sold a substantial ₹91m worth of stock at a price of ₹1,297 per share. That diminished their holding by a very significant 100%, which arguably implies a strong desire to reallocate capital.

See our latest analysis for HDFC Bank

The Last 12 Months Of Insider Transactions At HDFC Bank

Over the last year, we can see that the biggest insider sale was by the insider, Nirav Shah, for ₹210m worth of shares, at about ₹1,400 per share. So we know that an insider sold shares at around the present share price of ₹1,303. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

All up, insiders sold more shares in HDFC Bank than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NSEI:HDFCBANK Insider Trading Volume May 13th 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of HDFC Bank

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. HDFC Bank insiders own about ₹32b worth of shares (which is 0.4% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About HDFC Bank Insiders?

Insiders sold HDFC Bank shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. But since HDFC Bank is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 4 warning signs for HDFC Bank (1 can't be ignored!) that we believe deserve your full attention.

Of course HDFC Bank may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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