The Federal Bank shares surged 2.77 per cent to ₹233.70 on the National Stock Exchange on Monday afternoon, touching a fresh 52-week high of ₹235.20, as investors reacted positively to the bank’s proposed capital raising through warrants issue.
The Kerala-based private sector lender is seeking to raise up to ₹6,196.5 crore through preferential allotment of 27.29 crore warrants to Asia II Topco XIII Pte. Ltd., an entity managed by investment firm Blackstone. The warrants, priced at ₹227 per share, represent up to 9.99 per cent of the bank’s post-issue paid-up share capital.
The board approved the transaction on October 24, which is subject to shareholder approval and regulatory clearances from the Reserve Bank of India and Competition Commission of India. An extraordinary general meeting has been scheduled for November 19 to seek shareholder consent, with November 12 fixed as the record date.
Under the investment agreement, Blackstone will gain the right to nominate one non-executive director to the board once all warrants are exercised, provided it maintains at least 5 per cent shareholding. The warrants carry an 18-month exercise period and are convertible in one or more tranches.
The stock witnessed robust trading activity with 16.21 million shares changing hands worth ₹377.84 crore by early afternoon. The bank has scheduled an analyst call on October 29 to discuss the transaction details and strategic rationale behind the capital infusion.