Blackstone takes 9.99% stake in India’s Federal Bank for $705M
American alternative asset manager Blackstone will invest about $705 million in India’s commercial lender Federal Bank via its Singapore subsidiary, acquiring a 9.99% stake. Subject to approvals, Blackstone will become the bank’s largest shareholder.
Federal Bank said a Blackstone affiliate will buy the stake through a mix of preferential shares and warrants worth ₹61.97 billion (about $705 million), with the right to nominate a non-executive director to the bank’s board once the deal closes.
Asia II Topco XIII Pte Ltd, a Singapore-based Blackstone entity, will route the investment. The transaction, which combines preferential shares and warrants, is contingent on shareholder and regulatory clearances from banking and competition authorities. Federal Bank said the deal would make Blackstone its largest shareholder upon completion. The announcement came on October 24, sending India Federal Bank shares up about 1% intraday in Mumbai. The Indian rupee reached a two-month high against the US dollar, touching 87.6350 per dollar - its strongest level since August 2025.
Federal Bank reported a 9.6% year-on-year decline in the September-quarter net profit amid lower treasury income and higher provisions, providing context for the planned capital infusion. The board seat nomination right will take effect with the warrant exercise. This deal adds to a busy year for Indian private-sector banking M&A and strategic stakes, including Emirates NBD’s $3 billion purchase of 60% of RBL Bank and Sumitomo Mitsui’s increase to roughly 25% of Yes Bank.
Cross-border interest in Indian lenders has grown in 2025 as overseas investors seek exposure to credit growth and digital banking infrastructure. Recent deals include Emirates NBD’s $3 billion plan for RBL Bank, Abu Dhabi’s IHC near $1 billion for Sammaan Capital, and SMFG’s $1.6 billion for a 20% stake in Yes Bank - bringing India financials M&A to roughly $15 billion this year. Meanwhile, U.S. markets face fresh credit losses, fraud cases at regional lenders, and tariff uncertainty - driving investors toward safe havens like record-high gold and lower Treasury yields.
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