Blackstone to pick up to 9/99% stake in Federal Bank for Rs 6196 crore
MUMBAI: Private equity investor Blackstone will pick up a 9.99% stake in Federal Bank for Rs 6,196.51 crore. The investment will be made through Asia II Topco XIII Pte Ltd, a Blackstone-controlled entity that handles the firm’s strategic transactions in India. Federal Bank’s board cleared the proposal on Oct 24, 2025. It now requires approvals from shareholders and regulators, including RBI and the Competition Commission.The bank will issue up to 27.29 crore warrants to the investor through a private placement. Each warrant can be converted into one equity share of face value Rs 2 at an issue price of Rs 227, including a premium of Rs 225. The investor will pay 25% of the issue price upfront and the balance at the time of conversion. The warrants must be exercised within 18 months. Any warrants not converted by then will lapse without refund.Once the investor holds at least 5% equity through conversion, it will have the right to appoint one non-executive director to the board, subject to shareholder approval and listing rules. The investor does not belong to the promoter group and is not related to Federal Bank’s entities.Indian banks have been raising private capital in 2025 through large transactions. RBL Bank received a commitment of Rs 26,853 crore from Emirates NBD for up to a 60% stake. IDFC First Bank raised Rs 7,500 crore from Warburg Pincus and another Rs 2,624 crore from Abu Dhabi Investment Authority. Yes Bank saw Japan’s Sumitomo Mitsui Banking Corporation take up to a 24.2% stake for about Rs 15,000 crore. Utkarsh Small Finance Bank completed a rights issue subscribed by institutional investors, including Madhu Kela’s investment trust.Federal Bank CEO KVS Manian said the fundraise will strengthen the capital base and support growth across retail, SME and digital businesses. He said the bank is maintaining a strong focus on capital adequacy and preparing for expansion, using a mix of fund-raising channels such as rights issues, preferential allotments and qualified institutional placements.The bank will seek shareholder approval at an extraordinary general meeting on Nov 19, 2025, held through video conferencing. Shareholders on record as of Nov 12, 2025 will be eligible to vote electronically.
