Federal Bank Approves Rs 6,196 Crore Fundraise via Preferential Issue to Asia II Topco

Federal Bank has cleared a proposal to raise up to Rs 6,196 crore through a preferential issue of warrants to Asia II Topco XIII Pte. Ltd. under which the investor will pay 25% of the issue price at the time of subscription and the remaining 75% at the time of conversion into equity shares. The bank will issue up to 27.29 crore warrants to Asia II Topco aggregating to Rs 6,196.51 crore, with each warrant giving the investor the right to buy one equity share of the bank later at a fixed price of Rs 227 per share.

Key Takeaways:

• Federal Bank's board has approved a proposal to raise up to Rs 6,196 crore through a preferential issue of warrants to Asia II Topco XIII Pte. Ltd.
• The investor will be granted a special right to nominate one non-executive director to the board after exercising all the warrants and holding at least 5% of the bank's paid-up share capital.
• The warrants can be exercised within 18 months from the date of allotment, and any unconverted warrants will lapse.
• The Preferential Issue is subject to approval from shareholders and regulatory bodies, including the Reserve Bank of India and the Competition Commission of India.
• The bank will hold an Extraordinary General Meeting (EGM) on November 19 to seek shareholder approval for the preferential issue and the special rights.
• The record date for determining eligible shareholders for e-voting has been set as November 12, 2025.
• The grant of special right to Asia II Topco will be subject to shareholder approval and will need to be renewed every five years.
• Federal Bank will issue up to 27.29 crore warrants to Asia II Topco XIII Pte. Ltd.at a price of Rs 227 per share, consisting of a face value of Rs 2 and a premium of Rs 225.

Statistics:

• Up to Rs 6,196 crore will be raised through a preferential issue of warrants to Asia II Topco XIII Pte. Ltd.
• The bank will issue up to 27.29 crore warrants to Asia II Topco aggregating to Rs 6,196.51 crore.
• The investor will pay 25% of the issue price at the time of subscription and the remaining 75% at the time of conversion into equity shares.
• The warrants can be exercised within 18 months from the date of allotment.
• Once fully converted, the investor will hold 9.99% of the bank's paid-up equity capital.
• The special right to nominate one non-executive director to the board will be granted to Asia II Topco XIII Pte. Ltd. after exercising all the warrants and holding at least 5% of the bank's paid-up share capital.

Sources:

• IE Online Media Services Pvt. Ltd.
• Contify.com