New York-based asset manager Blackstone will acquire a 9.9% stake in Indian private lender Federal Bank by investing INR 61.9 bn (USD 705.05 mn), Reuters reports. The investment, through its affiliate Asia II Topco XIII, will be made via a preferential issue of 272.97 mn warrants, each convertible into one equity share at INR 227 (USD 2.6) per share. Upon conversion, Blackstone will hold the right to nominate one non-executive director, subject to holding at least 5% of the bank’s paid-up capital and regulatory approvals.

Shareholder approvals: The Kochi-based lender has called for an extraordinary general meeting on 19 November. Federal Bank has no promoter and all its shares are held publicly.

Background: Federal Bank has over 1.5k branches across India. As of June, the lender holds approximately 1.26% of the market share in bank advances and 1.01% in bank deposits countrywide. It handles about 20% of India's total personal inward remittances. (Times of India)

Meanwhile, foreign capital is rewriting the Indian banking playbook in 2025, as M&A deals surged 127% y-o-y with 8 bn worth of investments between January-September, Business Standard reports. Emirates NBD’s USD 3 bn acquisition of a 60% stake in RBL Bank is the largest-ever foreign takeover of an Indian lender. Japan-based SMBC made a USD 1.6 bn purchase of 24% in Yes Bank, while Abu Dhabi’s IHC invested nearly USD 1 bn for 43.5% in Sammaan Capital.

The surge of global investment marks one of the most active years for cross-border banking deals in recent Indian history. Private equity firms Warburg Pincus and Abu Dhabi Investment Authority also jointly infused USD 877 mn into IDFC FIRST Bank, while Bain Capital bought 18% of Manappuram Finance for USD 508 mn, the business daily added.

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