IDFC First Bank Insiders Sell ₹282m Of Stock, Possibly Signalling Caution

In the last year, many IDFC First Bank Limited (NSE:IDFCFIRSTB) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for IDFC First Bank

IDFC First Bank Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Non-Executive Non-Independent Director, Mahendra Shah, for ₹49m worth of shares, at about ₹87.99 per share. So we know that an insider sold shares at around the present share price of ₹82.16. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

IDFC First Bank insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like IDFC First Bank better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At IDFC First Bank Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at IDFC First Bank. Specifically, insider Anil Singhvi ditched ₹17m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of IDFC First Bank

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. IDFC First Bank insiders own about ₹5.1b worth of shares. That equates to 0.9% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About IDFC First Bank Insiders?

An insider sold IDFC First Bank shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that IDFC First Bank is growing earnings. 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. In terms of investment risks, we've identified 1 warning sign with IDFC First Bank and understanding it should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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