Blackstone to Inject ₹6,196 Crore into Federal Bank, Securing 9.99% Strategic Stake
Kochi, October 24, 2025: Federal Bank Ltd., the premier Kerala-based private lender, has approved a landmark capital infusion from global private equity heavyweight Blackstone. The bank’s board greenlit the preferential issue of 27.29 crore convertible warrants to Asia II Topco XIII – a Blackstone affiliate – at ₹227 per share, matching Thursday’s closing price. This move triggered an immediate 1.6% stock surge on Friday, October 23, with shares hitting a record high of ₹232.2 amid strong investor confidence.
Valued at ₹6,196 crore, this strategic investment requires Blackstone to pay 25% upfront upon warrant subscription, with the remaining 75% due upon conversion to equity shares. Post-conversion, Blackstone will command a 9.99% ownership stake in Federal Bank, positioning it as the lender’s second-largest shareholder while significantly bolstering its capital buffers beyond regulatory requirements.
Under the agreement, Blackstone gains board representation rights upon full warrant exercise and maintaining minimum 5% shareholding. The Prime News Network previously confirmed this 9.99% preferential share offer had attracted multiple marquee private equity firms before Blackstone’s definitive commitment.
Federal Bank enters this deal from a position of strength, reporting a robust 15.71% Capital to Risk-weighted Assets Ratio (CRAR) and 14.37% tier-1 capital ratio – substantially above mandated 9% and 6% thresholds. Its healthy 84.7% credit-deposit ratio further validates the lender’s operational stability as it capitalizes on India’s mid-sized banking sector consolidation wave.
This transaction follows high-profile investments in India’s banking sector, including Emirates NBD’s ₹27,000 crore acquisition of RBL Bank and Sumitomo Mitsui’s 20% stake in Yes Bank. Federal Bank’s shares have surged 18% in the past month, reversing earlier losses to deliver positive year-to-date returns as market sentiment strengthens around strategic capital partnerships.
