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Federal Bank just landed a major foreign investor as New York’s Blackstone will pick up a 9.99% stake worth ₹6,196 crore through its affiliate Asia II Topco XIII.
What’s going on: The deal will happen through a special share sale where Federal Bank will give 273 million warrants to Blackstone, each worth ₹227, which can later be turned into shares.
Blackstone will pay 25% upfront and the rest on conversion within 18 months. Once the warrants turn into shares, the firm will officially own nearly 10% of the bank and even get the right to nominate a board member, provided it holds at least 5% equity.
Federal Bank, which has no promoter and is entirely publicly held, gains a strong institutional backer at a time when global liquidity and foreign interest in Indian financials are soaring.
Zoom out: It’s raining big foreign money in Indian banks.
Emirates NBD’s $3 billion RBL Bank buy, SMBC’s 24% in Yes Bank, and IHC’s $1 billion in Sammaan Capital show the trend.
With over $7 billion in deals this year alone, India’s banking sector is becoming the new playground for global capital.
