SYNOPSIS: The CCI approved Blackstone’s proposal to acquire a 9.99% stake in Federal Bank via warrants through its arm Asia II Topco XIII, strengthening foreign investor participation in the private banking space.
During Wednesday’s trading session, shares of the second-largest bank and the largest private sector bank in Kerala are in focus on the stock exchanges, following the Competition Commission of India’s (CCI) clearance of US-based Blackstone’s proposal to acquire a 9.99 percent stake through warrants.
At 11:04 a.m., shares of Federal Bank Limited were trading at Rs. 264.65 on BSE, compared to its previous closing price of Rs. 265.4, with a market cap of Rs. 65,126 crores. The stock has delivered positive returns of over 34 percent in one year, and has gained by around 7 percent in the last one month.
What’s the News:
India’s fair trade regulator, Competition Commission of India (CCI), on Tuesday, 23rd December, approved US-based private equity major Blackstone’s proposal to acquire a 9.99 percent stake in Federal Bank through warrants. The investment will be routed via Blacstone’s arm Asia II Topco XIII Pte Ltd.
Under the proposed acquisition, Asia II Topco XIII Pte Ltd. will acquire certain warrants that each carry a right to subscribe to 1 fully paid-up equity share of Federal Bank. Upon full exercise of the warrants, the acquirer will hold 9.99 percent of the bank’s paid-up share capital on a fully diluted basis.
As part of the arrangement, Blackstone will also have the right to nominate a director on the Federal Bank’s board, provided it maintains a minimum shareholding of 5 percent, according to the regulatory filing.
In a separate order, the CCI also approved Tata Steel Limited’s proposal to acquire sole control of Tata BlueScope Steel Private Limited. This will be achieved by Tata Steel purchasing the remaining 50 percent equity stake currently held by BlueScope Steel Asia Holdings Pty Ltd.
Tata BlueScope Steel is currently a 50:50 joint venture between BlueScope Steel Limited (Australia) and Tata Steel Downstream Products Limited (TSDPL), a wholly owned subsidiary of Tata Steel.
Financials & more:
Federal Bank reported a marginal growth in its net interest income (NII), showing a year-on-year increase of around 7 percent from Rs. 2,612 crores in Q2 FY25 to Rs. 2,786.7 crores in Q2 FY26. In contrast, its net profit decreased during the same period from Rs. 1,104.5 crores to Rs. 1,019.4 crores, representing a decline of around 8 percent YoY.
Federal Bank reported strong and steady operating performance in Q2 FY26, with net interest income, fee income, and para-banking fee income at record highs. Key metrics remained healthy, with ROA at 1.09 percent, ROE at 11.01 percent, and NIM at 3.06 percent.
The bank posted EPS of Rs. 15.42 and BVPS (Book Value Per Share) of Rs. 141.58, while maintaining a CRAR (Capital to Risk-Weighted Assets Ratio) of 15.71 percent. Asset quality stayed stable, with credit cost at 50 bps and a slippage ratio of 0.94 percent. The balance sheet stood at Rs. 3.56 lakh crore, supported by a provision coverage ratio (PCR) of 73.45 percent and fee income of Rs. 886 crore, reflecting resilient execution despite macro challenges.
Federal Bank Limited is engaged in providing banking and financial services, including retail and corporate banking, para banking activities such as debit and credit cards, third-party product distribution, etc., treasury and foreign exchange business.
Written by Shivani Singh
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