Federal Bank Board Clears 9.99% Stake Sale to Blackstone for ?6,196.5 Crore

Mumbai — In a major strategic move, Federal Bank on Friday announced that its Board of Directors has approved the sale of a 9.99 per cent stake to an affiliate of global private equity giant Blackstone for ?6,196.5 crore.

The transaction will be executed through the issue of preferential equity shares and warrants, the bank said in an exchange filing.

Under the deal structure, 25 per cent of the warrant issue price will be payable at the time of subscription, with the remaining 75 per cent due upon conversion of the warrants into equity shares. Once completed, Asia II Topco XIII Pte. Ltd., a Blackstone affiliate, will hold 9.99 per cent of Federal Bank’s equity.

Federal Bank plans to issue over 27 crore warrants, each priced at ?227, with each warrant convertible into one equity share at the same price, unless otherwise specified.

As part of the agreement, the Board has also approved granting special nomination rights to the Blackstone affiliate—allowing it to nominate one retiring non-executive director to the Board once all the warrants have been exercised.

To finalize the transaction, Federal Bank will convene an Extraordinary General Meeting (EGM) on November 19 to seek shareholder approval. The record date for determining eligible shareholders has been set for November 12.

The investment marks another major global bet on India’s booming financial services sector, which continues to attract strong foreign investor interest.

Earlier this month, Emirates NBD, the UAE’s second-largest bank, announced plans to acquire a majority stake in RBL Bank for about $3 billion. In parallel, IDFC FIRST Bank and Sammaan Capital have secured investment commitments from Warburg Pincus and Abu Dhabi’s International Holding Company (IHC), respectively.

Following the announcement, shares of Federal Bank edged up 0.86 per cent to ?229.30 apiece as of 11:30 a.m. on Friday.

With inputs from IANS