Federal Bank Receives RBI Approval for Asia II Topco XIII to Acquire Around 10% Stake

Federal Bank announced on February 5 that it has received approval from the Reserve Bank of India (RBI) permitting Asia II Topco XIII Pte. Ltd. to acquire up to 9.99% of its paid‑up share capital or voting rights. The bank disclosed this development through a regulatory filing made on the same day.

The approval is subject to conditions set by the central bank, as communicated to the lender. This marks a key step in the acquisition process initiated by the private equity‑backed investor.

RBI Approval and Acquisition Details

Federal Bank stated that the RBI has formally allowed Asia II Topco XIII Pte. Ltd. to acquire an aggregate holding of up to 9.99% in the bank. This approval was conveyed on February 5 through a regulatory filing, ensuring transparency in the disclosure process.

The clearance specifies that the acquisition must adhere to conditions prescribed by the central bank. This authorisation represents a regulatory milestone in the investor’s planned stake purchase.

Background On Blackstone’s Stake Acquisition Route

In December last year, the Competition Commission of India (CCI) granted approval to U.S.‑based Blackstone for acquiring a 9.99% stake in Federal Bank through warrants. Asia II Topco XIII Pte. Ltd., an arm of Blackstone, is the designated acquiring entity executing this transaction.

The CCI clarified that the proposed combination involves the acquisition of warrants, each offering the right to subscribe to one fully paid‑up equity share of Federal Bank. This structure positions Blackstone to gradually build its stake upon exercise of the warrants.

Federal Bank’s Financial Performance and Asset Quality

Federal Bank reported a 9% year‑on‑year rise in its Net Interest Income (NII), taking the figure to ₹2,653 crore. The lender also posted a 9% increase in net profit, reaching ₹1,041 crore during the reported period.

Asset quality strengthened sequentially, with Gross NPAs improving to 1.72% from 1.83% in the previous quarter. Net NPAs also improved to 0.42% compared to 0.48% last quarter, signalling better loan book performance.

Improvement In Absolute NPA Levels

The bank recorded an improvement in absolute Gross NPA levels, which declined to ₹4,447 crore from ₹4,532 crore in the prior quarter. Similarly, absolute Net NPAs decreased to ₹1,068 crore from ₹1,165.2 crore reported in September.

These improvements indicate sustained progress in credit monitoring and recovery operations. The overall asset‑quality trajectory aligns with the bank’s efforts to maintain financial stability.

Read More: Federal Bank Reports Record Q3FY26 Performance.

Conclusion

Federal Bank’s receipt of RBI approval for Asia II Topco XIII Pte. Ltd.’s 9.99% stake acquisition marks a significant regulatory advancement in the transaction. With earlier CCI clearance already in place, the investment process has progressed smoothly under the oversight of relevant authorities.

The bank’s financial performance and improved asset quality further strengthen its position ahead of the planned capital infusion. As regulatory steps align, the acquisition route reflects growing investor interest in the private‑sector lender.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.