MUMBAI : Blackstone Inc. will acquire nearly a 10% stake in Federal Bank Ltd. for about ₹6,200 crore ($740 million), in one of the biggest private equity bets on India’s banking sector this year.

The Kerala-based lender said it will issue more than 270 million warrants on a preferential basis to Blackstone affiliate Asia II Topco XIII Ltd. at ₹227 apiece. Upon conversion, the US investment giant will hold a 9.99% shareholding in the bank.

The move underscores Blackstone’s confidence in India’s expanding financial services industry, where rising consumer demand and robust credit growth continue to attract global investors. The infusion is expected to bolster Federal Bank’s capital adequacy and support its retail and SME lending expansion.

Federal Bank, headquartered in Aluva, has emerged as one of India’s fastest-growing private lenders, leveraging digital banking initiatives and maintaining strong asset quality. Its latest quarterly earnings showed steady growth in net profit and loan book, reflecting the resilience of India’s banking sector amid a high-interest-rate environment.

The deal adds to a string of high-profile investments by foreign funds seeking exposure to India’s financial institutions — a sector viewed as a key driver of the country’s economic momentum.