- Federal Bank approved preferential allotment of shares to Blackstone
- Blackstone's affiliate subscribed to 27 crore warrants at Rs 227 each
- Blackstone paid Rs 1,549 crore initially for 25% of the warrant issue size
Federal Bank Ltd. board on Monday approved preferential allotment of shares to Blackstone Inc., the world's largest alternative asset manager, as part of the Rs 6,200-crore investment deal secured in October last year.
The Kerala-based bank has issued over 27 crore warrants via a preferential allotment to Blackstone's Singapore-based affiliate Asia II Topco XIII Pte. Ltd. for Rs 227 apiece, according to an exchange filing on Friday.
The US firm has paid Rs 1,549 crore, or 25% of the warrant issue size, for the initial subscription, and the remaining 75% will be payable at the time of allotment of equity shares after exercise of warrants. The warrants have to be converted in 18 months.
After the exercise of warrants into shares, Blackstone will own a 9.99% shareholding in Federal Bank and become the single largest shareholder of the private lender. The firm will be granted a special right to nominate one retiring non-executive director on the Federal Bank board upon exercise of all the warrants after it holds at least 5% of the paid-up share capital.
The Competition Commission of India approved the Federal Bank-Blackstone deal in December, followed by Reserve Bank of India's nod earlier this month.
Shares of Federal Bank traded 0.5% higher at Rs 289.60 on the NSE, as of 1:50 p.m., compared to 0.3% rise in the benchmark Nifty 50. The stock is up 60% in the last 12 months.
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