Blackstone to Invest $705 Million in Federal Bank for 9.9% Stake

Global private equity powerhouse Blackstone is set to invest 61.97 billion rupees ($705.05 million) in India’s Federal Bank, securing a 9.9% ownership stake through preferential equity shares and warrants. The move marks one of Blackstone’s most significant forays into India’s banking sector and underscores its confidence in the country’s growing financial services landscape.

According to Federal Bank’s announcement, the investment will be made via Asia II Topco XIII Pte Ltd, a Singapore-based affiliate of Blackstone. Upon completion, the deal will grant Blackstone the right to nominate one non-executive director to the bank’s board, strengthening the partnership and aligning governance with global investment standards.

The transaction, however, remains subject to regulatory clearances. Approvals are required from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI), alongside shareholder consent for the preferential share issuance and board nomination. These approvals will be discussed and voted upon at the bank’s extraordinary general meeting (EGM), scheduled for November 19, 2025.

Market sentiment reacted positively to the announcement, with Federal Bank’s shares rising 1.5% to 231.37 rupees following the news. Analysts suggest that the investment could bolster the bank’s capital base and support its expansion strategy amid India’s rapidly evolving financial ecosystem.

Blackstone’s investment signals growing global interest in Indian banking and fintech, as international investors continue to tap into the nation’s robust economic growth and rising credit demand. For Federal Bank, the partnership could pave the way for enhanced digital capabilities, operational efficiencies, and stronger institutional backing in an increasingly competitive market.