Federal Bank shares jumped nearly 2% in early trade on Friday after global investment giant Blackstone announced plans to acquire a 9.9% stake in the private sector lender through a preferential issue of warrants worth ₹6,196 crore. This marks one of the largest private equity investments in India’s banking sector in recent years, signaling strong global confidence in the country’s financial industry.
The Board of Directors of The Federal Bank Limited approved the proposal at its meeting held on October 24, 2025. Under the plan, the bank will issue up to 27.29 crore warrants priced at ₹227 each, with each warrant convertible into one fully paid equity share having a face value of ₹2. The investor in this transaction, Asia II Topco XIII Pte. Ltd., an affiliate of Blackstone, will acquire these warrants via a private placement route, subject to necessary regulatory approvals from shareholders, the Reserve Bank of India (RBI), and the Competition Commission of India (CCI).
The total consideration for the preferential issue stands at approximately ₹6,196.5 crore. As per the terms, 25% of the total amount will be paid upfront at the time of subscription, while the remaining 75% will be payable upon conversion into equity shares. The warrants will have a tenure of 18 months, within which Blackstone can exercise its right to convert them into shares in one or more tranches. If not converted within this period, the warrants will lapse, and the upfront payment will be forfeited.
Once fully converted, Blackstone will hold nearly 9.99% of the bank’s paid-up share capital, giving the global fund a meaningful minority stake in one of India’s most respected private lenders.
Federal Bank has also agreed to grant certain special rights to the investor after the full conversion of warrants. Upon holding at least 5% of the bank’s paid-up capital, Blackstone will have the right to nominate one non-executive director to the board of the bank. This nomination will be subject to shareholder approval under Regulation 31B of SEBI’s Listing Obligations and Disclosure Requirements (LODR) and will need to be renewed every five years.
To seek shareholder approval for the preferential issue and related matters, the bank has scheduled an Extraordinary General Meeting (EGM) on November 19, 2025, at 11 a.m., to be conducted through video conferencing. The record date for determining eligible shareholders to vote at the meeting has been fixed as November 12, 2025.
This major investment is expected to bolster Federal Bank’s capital base, strengthen its balance sheet, and provide the financial flexibility needed to support future growth initiatives. The ₹6,196 crore capital infusion will enable the bank to expand across retail, SME, and corporate segments while enhancing overall competitiveness.
