Blackstone gets RBI approval for 9.99% stake purchase in Federal Bank

The investment will make the private equity firm the largest shareholder in Federal Bank, which does not have a promoter, with all its shares publicly held

Private lender Federal Bank on Thursday said the Reserve Bank of India (RBI) has approved private equity firm Blackstone to acquire an up to 9.99 per cent stake in it.

Blackstone will invest ₹6,196.51 crore in Federal Bank through its affiliate Asia II Topco XIII Pte Ltd via a preferential issue on a private placement basis.

 

According to a notification from October 2025, the bank will issue up to 272.97 million warrants, each convertible into one fully paid-up equity share of face value ₹2, at a price of ₹227 per share (including a premium of ₹225). The investment will make the private equity firm the largest shareholder in the bank, as it does not have a promoter and all its shares are publicly held.

   

The approval adds to the growing foreign investment interest in the Indian banking sector. Last year, Emirates NBD announced an investment of $3 billion for a 60 per cent stake in RBL Bank, the largest foreign investment in India’s private banking space. Before that, Japan’s SMBC acquired a 24 per cent stake in Yes Bank, while Warburg Pincus and Abu Dhabi Investment Authority together have invested $877 million in IDFC First Bank.

 

Blackstone's move also follows reports that the Centre is weighing a proposal to permit foreign investors to hold up to 49 per cent in state-run banks. At present, foreign ownership in public sector banks is limited to 20 per cent, compared with 74 per cent in private banks and 100 per cent foreign direct investment in domestic insurers.