Federal Bank plans Rs 6,196 crore Fundraise via warrants; Blackstone join as investor

Federal Bank has approved the issuance of warrants by way of preferential issue on a private placement basis. In an exchange filing on Thursday (October 24), the lender said that the board, at its meeting held today, has approved a proposal to raise Rs 6,196.5 crore through a preferential warrants issue to Blackstone, giving the investor up to 9.99 per cent stake and board right.

Details of the issue

The bank will issue 27,29,74,043 warrants to Blackstone at Rs 227 per warrant. Each warrant carries the right to subscribe to one equity share of the company having a face value of Rs 2 each (including a premium of Rs 225 per equity share).

Add Zee Business as a Preferred Source

The tenor of the warrants is 18 months from the date of allotment.

Stake and board rights for Blackstone

Following the issuance, Blackstone's Asia II Topco XIII Pte. Ltd. will hold a 9.99 per cent stake in Federal Bank. In addition, Blackstone will have the right to appoint one non-executive director once it holds a 5 per cent stake in the bank.

Legal and regulatory compliance

The bank stated that the warrants will be issued “to Asia II Topco XIII Pte. Ltd. for cash consideration aggregating up to Rs 6,196,51,07,761, in accordance with the provisions of the Companies Act, 2013 and the rules made thereunder, and the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended, and other applicable laws.”

Subject to approvals

The issuance of warrants, the filing added, is subject to conditions precedent, including approvals from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI).

Federal Bank Share Price

At the time of filing this report, Shares of Federal Bank traded in the green at Rs 229, up 0.53 per cent on NSE.