Blackstone Becomes India’s Federal Bank’s Largest Shareholder In $705 Million Deal
MUMBAI — India’s Federal Bank announced on October 24 that its Board of Directors has approved the sale of a significant 9.99 per cent stake to an affiliate of US-based private equity giant Blackstone. The deal, valued at $705 million, will establish the Blackstone affiliate, Asia II Topco XIII Pte. Ltd., as the bank’s largest shareholder once the transaction is finalized.
The bank’s Board has approved granting the Blackstone affiliate the right to nominate one retiring non-executive director once all warrants are exercised. The bank will seek shareholder approval for the proposed deal at an Extraordinary General Meeting scheduled for November 19.
Blackstone President and Chief Operating Officer Jon Gray praised India’s underlying economic strength, pointing to a “compelling long-term opportunity” driven by a strong economy, a rapidly growing middle class, and aggressive infrastructure development.
The Federal Bank deal underscores a wider trend of increased global investor interest in the Indian financial services sector.
Earlier this month, the UAE’s second-largest bank, Emirates NBD, announced its intention to acquire a majority stake in RBL Bank in a separate high-profile transaction valued at $3 billion. Simultaneously, other major financial institutions are securing fresh capital from international sources, with IDFC FIRST Bank and Sammaan Capital recently receiving investment commitments from global players Warburg Pincus and Abu Dhabi’s International Holding Company, respectively.
Gray’s confidence is not limited to the financial sector. He highlighted India alongside real estate and secondary markets as areas with the strongest investment potential globally. Speaking about the country, Gray reiterated its resilience and potential, noting that despite geopolitical tensions, “India is investing heavily in infrastructure and has a rapidly rising middle class. This is a place we particularly like.”
Regarding the commercial real estate sector, which he sees as entering a favorable phase, Gray stated, “It’s been three and a half very tough years for commercial real estate, but now a good dynamic has taken over. New supply has dropped by nearly 70 per cent, costs are coming down, and assets have been repriced. This is the time to be an investor in commercial real estate.” (IANS)
