Blackstone to Pick Up 9.99% in Federal Bank for ₹6,196 Cr

Kochi-based Federal Bank on Friday announced that it will sell a 9.99% stake to Singapore-based investment firm Asia II Topco XIII Pte. Ltd., an affiliate of US private equity giant Blackstone. The deal, valued at ₹6,196.5 crore, will allow the Blackstone affiliate to nominate one retiring non-executive director to the Board.

The bank plans to issue over 27 crore warrants at ₹227 each, allowing the holder to convert each warrant into one equity share of the bank at the same price. Once exercised, Asia II Topco XIII Pte. Ltd. would hold a 9.99% stake in Federal Bank. Investors will pay 25% of the issue price upfront at the time of subscription, with the remaining 75% payable upon conversion of the warrants into shares.

The warrants will be valid for 18 months, after which any unexercised warrants will lapse. Upon converting all warrants and maintaining at least a 5% ownership, Asia II Topco XIII will gain the right to nominate one retiring non-executive director to Federal Bank’s Board, subject to shareholder approval under SEBI Regulation 31B.

Shares of Federal Bank were trading at ₹228.85 per share, up 0.66%, as of 10:57 am on October 24.

Federal Bank will hold its Extraordinary General Meeting (EGM) on November 19, 2025, via video conference, to seek shareholder approval for the preferential issue to Asia II Topco XIII Pte. Ltd. and the grant of a special board nomination right to the investor.

The record date for determining eligible shareholders is November 12, 2025. The bank said the agreement with Asia II Topco XIII is subject to approvals from the Reserve Bank of India (RBI), the Competition Commission of India (CCI), and the bank’s shareholders.

Blackstone, which has about $50 billion worth of private equity and real estate investments in India, has identified the country as its best investment market globally.

The deal comes at a time when India’s banking sector is witnessing a series of foreign investment transactions. It began with Japan’s Sumitomo Mitsui Banking Corporation (SMBC) acquiring a 20% stake in Yes Bank, with plans to purchase an additional 4.2%.

Meanwhile, Dubai-based Emirates NBD is reportedly close to acquiring a majority stake in RBL Bank through its Indian subsidiary, marking a potential ₹18,000 crore ($2.2 billion) equity infusion at around ₹295 per share. The deal may be followed by an open offer to acquire an additional 23–24% stake worth about ₹9,000 crore.