Federal Bank to raise Rs 6,196 crore via preferential issue of warrants to Blackstone group entity

The Federal Bank Ltd on Friday announced that its board has approved a preferential issue of warrants worth Rs 6,196.5 crore to Asia II Topco XIII Pte. Ltd., a group entity of global private equity firm Blackstone. The warrants will be issued on a private placement basis, subject to shareholder and regulatory approvals, the bank said in an exchange filing.

Earlier this week, Moneycontrol had reported that The Federal Bank is set to roll out a preferential issue in exchange for a significant minority stake of 9.99 percent.

Each warrant will carry the right to subscribe to one fully paid-up equity share of face value Rs 2 at a price of Rs 227 per share, including a premium of Rs 225. The proposed issue comprises up to 27.3 crore warrants, which, on full conversion, would result in Asia II Topco XIII Pte. Ltd. holding about 9.99 percent of the bank’s paid-up equity share capital.

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The investment agreement between The Federal Bank and the Blackstone entity was signed on October 24, 2025. The warrants will have a tenor of 18 months from the date of allotment and may be exercised in one or more tranches. The investor will pay 25 percent of the issue price at the time of subscription, with the balance 75 percent payable upon conversion into equity shares. Any unexercised warrants at the end of the tenure will lapse, and the amount paid on them will be forfeited.

The Federal Bank said its board has also approved granting a special right to the investor to nominate one non-executive director on its board, once all warrants are exercised and the investor continues to hold at least 5 percent of the bank’s paid-up capital. The nomination right will be subject to shareholder approval under Regulation 31B of SEBI’s Listing Obligations and Disclosure Requirements Regulations.

The bank has called an extraordinary general meeting (EGM) of shareholders on November 19, 2025, via video conferencing to seek approvals for the preferential issue and the grant of the board nomination right. The record date for e-voting has been fixed as November 12, 2025.