The Reserve Bank of India (RBI) has authorised Asia II Topco XIII, an affiliate of Blackstone based in Singapore, to acquire up to 9.99% of the paid-up share capital or voting rights in Federal Bank.
This follows approval from the Competition Commission of India (CCI) in December 2025 for Blackstone’s plan to invest in Federal Bank through warrants.
The investment, totalling Rs61.9bn ($705m), will be made through Asia II Topco XIII.
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Federal Bank is expected to issue around 272.97 million convertible warrants at Rs227 each as part of the arrangement.
Investors will need to pay 25% of the issue price upon subscribing and the remaining 75% when shares are allotted upon exercising the warrants.
The agreement includes a provision allowing Blackstone’s affiliate to nominate a retiring non-executive director to Federal Bank’s board once all warrants are exercised.
The move comes amid other recent foreign investments in Indian financial institutions.
In October, Emirates NBD announced the acquisition of a stake of up to 60% in RBL Bank for nearly $3bn.
The deal was described as the largest ever foreign direct investment in the Indian financial services industry.
Sumitomo Mitsui Banking Corporation acquired its holding in Yes Bank by 20% in May and an additional 4.2% in September.
Mitsubishi UFJ Financial Group’s subsidiary MUFG Bank agreed to acquire a 20% stake in Shriram Finance through preferential allotment, an investment valued at approximately Rs396.2bn and pending regulatory approval.
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