Mumbai, Oct 24 (NationPress) On Friday, Federal Bank revealed that its Board has sanctioned the sale of a 9.99% stake to an affiliate of the US-based private equity giant Blackstone.

This transaction, valued at ₹6,196.5 crores, will be executed through the issuance of preferential equity shares and warrants, as stated by the bank.

According to the agreement, 25% of the warrant issue price will be remitted at the time of subscription, while the remaining 75% will be due upon the conversion of the warrants into equity shares.

Upon completion of this transaction, Asia II Topco XIII Pte. Ltd., a Blackstone affiliate, will possess a 9.99% stake in Federal Bank.

The bank intends to issue over 27 crore warrants, each priced at ₹227. Each warrant can subsequently be transformed into a single share of the bank, without any additional payment beyond the issue price unless otherwise stated.

As part of this agreement, the Federal Bank Board has also sanctioned the provision of a special right to the Blackstone affiliate to appoint one retiring non-executive director to the Board once all the warrants are exercised.

Federal Bank will convene an Extraordinary General Meeting (EGM) on November 19 to seek the approval of shareholders for the proposed transaction with Blackstone. The record date to ascertain eligible shareholders is set for November 12.

Blackstone's investment in Federal Bank is part of a growing trend of significant transactions in India's burgeoning financial sector, which continues to attract considerable interest from global investors.

Earlier this month, Emirates NBD -- the second-largest bank in the UAE -- announced intentions to acquire a majority stake in RBL Bank for $3 billion.

Furthermore, IDFC FIRST Bank and Sammaan Capital have secured investment commitments from Warburg Pincus and Abu Dhabi’s International Holding Company (IHC).

Following the announcement, shares of Federal Bank experienced a slight uptick, trading at ₹229.30 each, reflecting a 0.86% increase as of 11:30 a.m. on Friday.