Blackstone to pick up 9.99% in Federal Bank for ₹6,197 cr

Global investor to buy nearly 10% stake in Kerala-based lender

- Ankit Gohel, Priyamvada C & Shayan Ghosh

Global investor Blackstone is set to buy nearly 10% stake in Kerala-based Federal Bank, becoming the latest foreign entity to covet a slice of a domestic bank. The acquisition for close to ₹6,200 crore will also mark Blackstone's latest bet on India's financial sector, where it has made multiple investments over the years.

The private bank's board on Friday okayed issuing warrants to a Blackstone affiliate, to be converted later to a 9.99% stake. Once the Blackstone entity's shareholding reaches 5%, it will get to nominate one non-executive director to the bank's board.

Federal Bank said its board has approved a preferential issue of 273 million warrants worth ₹6,196.5 crore to Blackstone affiliate Asia II Topco XIII Pte. Ltd.

Each warrant can be converted to one equity share at a price of ₹227 each. The Blackstone affiliate will pay 25% of the issue price at the time of warrant subscription, and the rest 75% during conversion to shares.

Shares of Federal Bank closed unchanged on BSE at ₹227.4.