Federal Bank 's board has approved a significant fund-raising initiative through a preferential issue of warrants, potentially impacting the bank's capital structure and strategic direction.

Key Details of the Preferential Issue

Strategic Implications

Upon completion of the preferential issue and assuming full conversion of warrants, Asia II Topco XIII Pte. Ltd. would hold a 9.99% stake in Federal Bank. This move aligns with the recent trend of significant investments in mid-sized Indian banks by private equity players.

Investor Rights

The agreement grants the investor the right to nominate one non-executive director to Federal Bank's board, subject to the following conditions:

1. Full conversion of all warrants
2. Maintaining at least a 5% stake in the bank
3. Shareholder approval under SEBI regulations

Financial Details

• The warrants have an 18-month exercise period.
• 25% payment is due at subscription, with the remaining 75% due at conversion.

Approval Process

The proposal requires approvals from:

1. Shareholders
2. Reserve Bank of India
3. Competition Commission of India

An Extraordinary General Meeting (EGM) is scheduled for November 19, 2025, to seek shareholder approval. The record date for voting eligibility is set for November 12, 2025.

This strategic move by Federal Bank could potentially strengthen its capital base, enabling it to capitalize on growth opportunities in the evolving Indian banking sector.

Federal Bank , a prominent Indian private sector bank, has issued a clarification regarding recent news reports about a potential 9.99% stake issue. The bank stated that no decision has been made on the matter, addressing speculation that had been circulating in the financial media.

Key Points of Clarification

• No Decision Made: Federal Bank emphasized that no decision has been taken by the Board regarding the reported 9.99% stake issue.
• Upcoming Board Meeting: The bank referenced a previously announced Board of Directors meeting scheduled for October 24, 2025, to evaluate various fund-raising options.
• Regulatory Compliance: In its clarification to the stock exchanges, Federal Bank affirmed its commitment to disclosure obligations under Regulation 30 of the SEBI Listing Regulations.

Context of the Clarification

The clarification came in response to a news item titled "Federal Bank to roll out preferential issue for 9.99% stake" that appeared on a financial news website on October 20, 2025. The bank's statement aims to address any potential market speculation arising from this report.

Regulatory Disclosure and Transparency

Federal Bank's response highlights its adherence to regulatory requirements:

The bank also confirmed that all material information requiring disclosure under the Listing Regulations has been duly communicated to the stock exchanges.

Market Impact and Legal Status

• Trading Movement: The bank stated it is not aware of any undisclosed information that could explain any unusual trading activity.
• Legal Proceedings: Federal Bank clarified that there are no regulatory or legal proceedings related to the subject matter of the news article.

This clarification serves to maintain transparency and provide accurate information to investors and stakeholders. As the situation develops, market participants will likely await the outcome of the upcoming Board meeting for any potential decisions regarding the bank's fund-raising strategies.