The Reserve Bank of India (RBI) has approved global private equity major Blackstone to acquire up to a 9.99% stake in Federal Bank, paving the way for one of the largest foreign investments in an Indian mid-sized private bank.
Blackstone will invest around ₹6,196 crore through its Singapore-based arm, Asia II Topco XIII Pte Ltd. The investment will be made through a preferential allotment of convertible warrants, subject to shareholder approval and other statutory clearances.
As part of the transaction, Federal Bank will issue up to 27.29 crore warrants to Blackstone at an issue price of ₹227 per share, which includes a premium over the market price. Each warrant can be converted into one fully paid equity share. Once fully converted, Blackstone’s holding will stand just under the 10% regulatory threshold for promoter classification.
The deal had earlier received clearance from the Competition Commission of India (CCI), removing a key regulatory hurdle before the RBI’s final approval.
Under the agreement, Blackstone will also have the right to nominate one non-executive director to Federal Bank’s board, provided its shareholding remains at 5% or more. This gives the investor a limited but meaningful role in the bank’s governance while maintaining its status as a minority shareholder.
Federal Bank is a professionally managed private lender with no single promoter, and its shareholding is widely dispersed among institutional and public investors. Analysts say Blackstone’s entry highlights growing global confidence in India’s banking sector, especially in lenders with strong retail and digital growth potential.
The fresh capital is expected to strengthen Federal Bank’s balance sheet, support future expansion plans, and improve its ability to grow its loan book across retail, MSME, and digital banking segments.
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