After NBD's RBL stake buy, Blackstone to acquire 9.99% in Federal Bank for ₹6,196.51 cr

In another big news after Emirates NBD's $3 billion investment in RBL Bank, Federal Bank on Friday announced that New York-based Blackstone will buy a 9.99% stake in the private lender by investing ₹6,196.51 crore through an affiliate company, Asia II Topco XIII. The investment will be made through a preferential issue on a private placement basis, the bank said in a stock exchange filing. "The investor shall subscribe to 27,29,74,043 warrants for cash for ₹227 per warrant, aggregating to ₹6,196,51,07,761," the Kochi-based lender said.

The investor will have the right to nominate one retiring non-executive director on the board of the bank, subject to applicable laws and terms of the investment agreement. The deal suggests the investor should have exercised its right to convert all the warrants, representing 9.99% of paid-up share capital on a fully-diluted basis; the investor should hold at least 5% of the paid-up share capital; and the approval of shareholders.

In another development, Federal Bank said its board has approved an additional stake of up to 4% in IDBI Federal Life Insurance Co Ltd (IFLIC) from IDBI Bank, subject to all relevant regulatory approvals. Bank currently holds a 26% stake in IFLIC, making it an associate, and post purchase, the total stake may increase up to 30%.

Its board has also approved an investment of ₹148 crore in its subsidiary, Fedbank Financial Services, through a rights issue. The company aims to infuse regulatory capital in the firm, and the current investment is more than 5% of the post-issue paid-up capital of FFSL.

Amid the development, shares of the bank are trading flat at ₹227.25 on the BSE. The board will conduct an extraordinary general meeting (EGM) on November 19, 2025, via video conferencing, in which it will seek approvals for the preferential issue and the board nomination right.

Federal Bank Q2 FY26 net profit rose 10.85% QoQ to ₹2,495 crore, reflecting stable margins. The bank earned its highest-ever fee income at ₹886 crore, underscoring continued momentum in non-interest revenue streams. The bank's operating profit stood at ₹1,644.17 crore, up 5.65% QoQ, while net profit rose 10.85% QoQ to ₹955.26 crore, driven by robust operating income and efficient cost management. The NIM improved 12 bps QoQ to 3.06%, and asset quality remained among the best in the decade, with GNPA at 1.83% and NNPA at 0.48%.

In a landmark M&A deal in India’s banking sector, Emirates NBD Bank, one of the largest banking groups in the Middle East, last week announced plans to acquire a 60% stake in RBL Bank for ₹26,853 crore, at ₹280 a share. The investment will be executed through a preferential issue of up to 95.9 crore fully paid-up equity shares. The transaction will make Emirates NBD the promoter and controlling shareholder of RBL Bank, subject to necessary approvals.