New Delhi, Oct. 24 -- Alternative asset manager Blackstone will acquire a 9.99% stake in Federal Bank for nearly Rs 6,196 crore (around $716 million).
The investment will be made via Blackstone affiliate Asia II Topco XIII Pte, the bank disclosed in an exchange filing.
According to terms of the agreement, the bank's board of directors has approved the preferential issue of up to 27.3 crore warrants. The warrants, priced at Rs 227 each, were issued on a private placement basis, the filing said. Each warrant carries a right to subscribe to one fully paid-up equity share of the bank having face value Rs 2 each.
The Ernakulam-based bank's board has also approved the grant of a special right to the investor to nominate a retiring non-executive director on the board upon exercise of all the warrants by the investor. The tenor of the warrants is 18 months from the date of their allotment.
The investor will pay 25% of the warrant issue price at the time of subscription of each warrant, while the remaining 75% shall be payable at the time of allotment of equity shares.
The bank's customer assets rose 6% year-on-year(y-o-y) to Rs 2.6 trillion as on June 30.
The latest investment in Federal Bank comes when the Indian banking sector has seen a flurry of investments.
Last week, Emirates NBD announced that it will invest $3 billion for a 60% stake in RBL Bank. Prior to this, SMBC acquired a 20% stake in YES Bank. Subsequently, SMBC acquired an additional 4.2% stake in the bank.
Published by HT Digital Content Services with permission from VC Circle.