Blackstone To Acquire Minority Stake In Federal Bank For Rs 6,200 Crore
Blackstone Inc., the world’s largest alternative asset manager, will acquire a minority stake in Federal Bank Ltd. for Rs 6,196 crore. The Kerala-based bank will issue over 27 crore warrants via a preferential allotment to Blackstone affiliate Asia II Topco XIII Pte. Ltd. for Rs 227 apiece, according to an exchange filing on Friday.
Deal Structure and Terms
An amount equivalent to 25% of the warrant issue price will be payable at the time of subscription, and the remaining 75% will be payable at the time of allotment of equity shares after exercise of warrants. The warrants have to be converted in 18 months.
After the exercise of warrants into shares, Blackstone will own a 9.99% shareholding in Federal Bank. The US firm will be granted a special right to nominate one retiring non-executive director on the Federal Bank board upon exercise of all the warrants after it holds at least 5% of the paid-up share capital.
Regulatory Approvals and Shareholder Meeting
The deal requires approval from shareholders, the Reserve Bank of India and the Competition Commission of India. Federal Bank will convene an Extra Ordinary General Meeting on Nov. 19, 2025, to seek their approval. The record date has been fixed as Nov. 12 for ascertaining the names of the shareholders.
Blackstone’s Investment in Indian Financial Sector
The Blackstone investment in Federal Bank is the latest in a string of deals in India’s booming financial sector that has attracted attention of global institutions. This month, UAE’s second largest lender Emirates NBD agreed to acquire a majority stake in RBL Bank Ltd. for $3 billion. IDFC FIRST Bank Ltd. received investment commitments from Warburg Pincus and Abu Dhabi Investment Authority.
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Impact on Federal Bank Share Price
Federal Bank share price rose as much as 1.9% to Rs 232 apiece, after the announcement, compared to a flat Nifty 50 index. The total traded volume so far in the day stood at 8.2 times its 30-day average. The relative strength index was at 81, indicating the stock is in overbought zone.
The stock advanced 22% in 12 months, and 15% on year-to-date basis. Out of 47 analysts tracking the company, 32 maintain a ‘buy’ rating, 14 recommend a ‘hold’ and one suggests ‘sell’, according to Bloomberg data. The average 12-month consensus price target implies a upside of 4%.
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