Blackstone fund infusion will give flexibility to consider acquisitions: Federal Bank CEO Manian – The Times of India

MUMBAI: Federal Bank chief KVS Manian said that the recently-announced capital raise from private equity investor Blackstone will give the lender flexibility to consider acquisitions to support growth, after the board approved a preferential issue of warrants to the US asset manager on Oct 24 in Kochi.The bank approved the issue of warrants representing up to 9.99% of its post-issue paid-up share capital to funds managed by Blackstone. The issue is priced at Rs 227 a share, at an 8% premium to the regulatory floor price, resulting in a committed capital infusion of Rs 6,196.5 crore. Blackstone will be entitled to a board seat on full conversion of the warrants, subject to its holding not falling below 5%. The bank said the transaction will need approvals from shareholders and regulators.The funds will strengthen capital adequacy and support both organic and inorganic expansion. The lender aims to advance its plan to rank among the top five private sector banks in India after the capital issue.Manian said the arrangement “is a strong vote of confidence in our team, our 95-year legacy of trust, and our strategy to emerge among the top private sector banks in India.” He said the structure “ensures capital availability aligned to our growth milestones, without immediate dilution.” He added that Blackstone “brings deep operating experience and access to their significant India portfolio,” supporting efforts to expand the bank’s digital and national presence. He said the capital raise improves flexibility to evaluate acquisitions “should the right fit arise.”Blackstone senior managing director Mukesh Mehta said the partnership shows its conviction in the bank’s franchise and in the growth potential of Indian banking. He said Blackstone will work with Manian and the management team “to position the bank for long-term success and to help it become one of India’s leading private sector banks.”The bank has focused on profitable growth and a stronger balance sheet in recent years. Its CASA ratio reached 31.0% in Q2FY26. Total deposits rose 7.3% year-on-year to Rs 2,88,919 crore. Net interest income stood at Rs 2,495 crore and fee income at Rs 886 crore in the quarter. The bank reported gross NPA of 1.8% and net NPA of 0.5%, while the provision coverage ratio stood at 73.5%. The transaction will keep CET1 and CRAR above regulatory requirements after completion.