This Insider Has Just Sold Shares In IDFC First Bank

Some IDFC First Bank Limited (NSE:IDFCFIRSTB) shareholders may be a little concerned to see that insider Mahendra Shah recently sold a substantial ₹49m worth of stock at a price of ₹87.93 per share. That sale reduced their total holding by 47% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for IDFC First Bank

IDFC First Bank Insider Transactions Over The Last Year

In fact, the recent sale by Mahendra Shah was the biggest sale of IDFC First Bank shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at below the current price (₹88.15). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 47% of Mahendra Shah's stake.

All up, insiders sold more shares in IDFC First 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!

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 IDFC First Bank

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. IDFC First Bank insiders own about ₹3.2b worth of shares. That equates to 0.5% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other 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. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, IDFC First Bank makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that IDFC First Bank has 2 warning signs and it would be unwise to ignore these.

Of course IDFC First 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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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.