Federal Bank has announced a significant development that could reshape its financial landscape. The bank is set to receive a substantial investment of $705 million from Blackstone, one of the world's largest alternative asset managers, for a 9.9% stake. This move comes on the heels of increased interest from notable investors, including Rekha Jhunjhunwala.

Blackstone's Strategic Investment

Blackstone plans to acquire a 9.9% stake in Federal Bank through a combination of preferential equity shares and warrants. This investment is subject to approvals from shareholders, the Reserve Bank of India (RBI), and competition regulators. Upon completion, Blackstone would become the largest shareholder in Federal Bank and gain the right to nominate a non-executive director to the bank's board.

Shareholder Approval and Warrant Details

The bank has scheduled an Extraordinary General Meeting (EGM) for November 19, 2025, to seek shareholder approval for the issuance of warrants to Blackstone. According to the EGM notice, Federal Bank proposes to issue up to 27,29,74,043 warrants at a price of ₹227.00 per warrant. Each warrant would be convertible into one equity share of the bank.

Capital Strengthening

This strategic investment is expected to significantly bolster Federal Bank's capital position. The bank anticipates that the transaction would enhance its Common Equity Tier 1 (CET1) ratio by approximately 280 basis points over an 18-month period, providing a substantial boost to its capital adequacy.

Rekha Jhunjhunwala's Increased Stake

Prior to the Blackstone announcement, Rekha Jhunjhunwala, a prominent investor, increased her stake in Federal Bank. During the second quarter of FY26, she purchased an additional 2.3 crore shares, raising her total shareholding to 5.9 crore shares, representing a 2.4% stake in the bank.

Market Response

The market has responded positively to these developments:

Several brokerages have issued bullish calls on Federal Bank following these announcements, with firms like ICICI Securities and PL Capital setting price targets of ₹250.00 for the bank's shares.

Implications for Federal Bank

The investment from Blackstone and increased stake by Rekha Jhunjhunwala signal strong confidence in Federal Bank's growth prospects. The capital infusion is expected to support the bank's expansion plans and strengthen its competitive position in the Indian banking sector.

As Federal Bank prepares for this transformative investment, shareholders and market observers will be closely watching the upcoming EGM and subsequent regulatory approvals. The bank's ability to leverage this new capital and strategic partnership could play a crucial role in shaping its future trajectory in India's dynamic banking landscape.

Federal Bank Ltd. has announced an upcoming investor and analyst conference call to discuss a significant proposed preferential issuance of warrants to funds managed by Blackstone. The call, scheduled for October 29, 2025, at 3:45 PM IST, aims to provide stakeholders with detailed insights into this strategic move.

Key Details of the Proposed Warrant Issuance

Conference Call Agenda

The call plans to cover:

1. Overview of the proposed transaction
2. Commercial and strategic rationale
3. Expected timelines
4. Other relevant considerations

Participants will have the opportunity to engage in a Q&A session during the call.

Significance of the Move

This proposed warrant issuance represents a substantial potential investment in Federal Bank by Blackstone, a globally renowned investment firm. The move could significantly bolster the bank's capital position, potentially enabling it to pursue growth opportunities and strengthen its market presence.

How to Join the Call

Federal Bank has provided multiple options for interested parties to join the conference call:

1. DiamondPass™ service: Click on the provided link to join
2. Universal Dial-In Numbers:
   • +91 22 6280 1270
   • +91 22 7115 8171
3. India National Toll Free: 1800 120 1221
4. International Toll Free numbers for various countries

Participants are advised to connect 10 minutes prior to the scheduled start time to ensure a smooth connection.

Implications for Shareholders

The bank has also announced an Extraordinary General Meeting (EGM) scheduled for November 19, 2025, at 11:00 AM IST. This meeting will be conducted through Video Conferencing / Other Audio Visual Means, in line with regulatory guidelines. Shareholders will likely vote on the proposed warrant issuance during this EGM.

As this development could have significant implications for Federal Bank's future strategy and capital structure, stakeholders are encouraged to participate in the upcoming investor call for more detailed information and to have their questions addressed by the management.

Federal Bank's move to potentially bring Blackstone on board as a significant investor marks a noteworthy development in the Indian banking sector, potentially setting the stage for enhanced growth and strategic opportunities for the bank.