(Reuters) -Blackstone will invest about $705 million in India’s Federal Bank for a 9.9% stake, the private lender said on Friday, adding to the growing list of large deals by marquee investors. The deal will make the private equity firm the largest shareholder in the bank. Dealmaking in Indian private banking space has picked up […]
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Blackstone to invest $705 million in India’s Federal Bank to become largest shareholder
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(Reuters) -Blackstone will invest about $705 million in India’s Federal Bank for a 9.9% stake, the private lender said on Friday, adding to the growing list of large deals by marquee investors.
The deal will make the private equity firm the largest shareholder in the bank.
Dealmaking in Indian private banking space has picked up pace this year. Last week, Dubai-based bank Emirates NBD purchased a 60% stake in RBL Bank for $3 billion. Japan’s Sumitomo Mitsui Banking Corporation bought a 20% stake in Yes Bank in May and then an additional 4.2% in September.
Blackstone will invest in Federal Bank through a Singapore-based affiliate that has entered a share-purchase agreement with the bank, which includes the right to nominate a non-executive director to its board.
The deal will be executed through preferential equity shares and warrants, and is subject to approval from shareholders and the banking and competition regulators.
Federal Bank’s shareholders will meet in a so-called extraordinary general meeting on November 19 to approve the preferential share issue and board seat.
Shares of lender rose 1.15% to 229.00 rupees in Mumbai.
The bank, which has a loan book of 2.44 trillion rupees, posted a 9.6% decline in its net profit to 9.55 billion rupees for the September quarter due to a decline in treasury income and a rise in funds kept aside for bad loans.
($1 = 87.8950 Indian rupees)
(Reporting by Ashwin Manikandan and Manvi Pant; Editing by Janane Venkatraman and Mrigank Dhaniwala)