Federal Bank to Receive $705 Million Investment from Blackstone for 9.9% Stake

Federal Bank announced a strategic development that could significantly strengthen its capital position. The bank is set to receive an investment of $705 million from Blackstone, one of the world’s largest alternative asset managers, for a 9.9% stake.

Blackstone’s Strategic Investment

Blackstone plans to acquire the stake through a combination of preferential equity shares and warrants. The transaction is subject to approvals from shareholders, the Reserve Bank of India (RBI), and competition regulators. Upon completion, Blackstone will become the largest shareholder in Federal Bank and gain the right to nominate a non-executive director to the board.

Shareholder Approval and Warrant Details

Federal Bank has scheduled an Extraordinary General Meeting (EGM) on November 19, 2025, to seek shareholder approval for issuing warrants to Blackstone. The proposal includes up to 27,29,74,043 warrants priced at ₹227.00 each, with each warrant convertible into one equity share of the bank.

Capital Strengthening and Growth Plans

The investment is expected to enhance Federal Bank’s Common Equity Tier 1 (CET1) ratio by approximately 280 basis points over 18 months, significantly improving its capital adequacy. The capital infusion will support expansion plans and strengthen the bank’s competitive position in India’s banking sector.

Market Update

As of 10:27 am on October 28, Federal Bank share price was trading at ₹232.77, down 0.54%. The stock has gained over 18% in the past year, reflecting investor confidence in its growth strategy.

Read More: Federal Bank Approves ₹6196.51 Crore Preferential Issue.

Conclusion

Federal Bank’s proposed $705 million investment from Blackstone marks a transformative step for the lender. With regulatory and shareholder approvals pending, the deal is expected to bolster capital strength and accelerate growth initiatives in the coming quarters.

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