Rekha Jhunjhunwala Purchases 2.3 Crore Shares in Federal Bank Before Blackstone’s Entry
In a significant move, prominent investor Rekha Jhunjhunwala has increased her stake in Federal Bank by acquiring 2.3 crore additional shares, representing approximately 0.9%. This transaction took place during the second quarter of FY26, as per the latest BSE filings.
Key Highlights of Rekha Jhunjhunwala’s Investment in Federal Bank
– Total Holding Increased: Following this acquisition, Jhunjhunwala’s total stake in Federal Bank now stands at 2.4%, as indicated by Trendlyne data.
– Ownership Details: She currently holds a total of 5.9 crore shares in Federal Bank, up from 3.6 crore shares in the previous quarter.
– Strategic Timing: Notably, this purchase occurred just ahead of Blackstone’s recent announcement to invest $705 million for a 9.9% stake in Federal Bank, positioning them as the largest shareholder and signifying a strong interest from global investors in India’s financial sector.
– Investment Structure: Blackstone will acquire its shares through a Singapore-based affiliate, which will also be entitled to nominate a non-executive director to the bank’s board.
Implications of the Investment
– Market Reactions: Following the news, multiple brokerages have issued bullish recommendations for Federal Bank’s stock.
– Performance Projections:
– ICICI Securities provided a Buy call with a target price of ₹250 per share, stating that the transaction could improve the CET1 ratio by approximately 280 basis points over the next 18 months.
– PL Capital emphasized that this capital infusion will strengthen Federal Bank’s balance sheet and boost its potential for growth and acquisitions.
Broader Market Context
– Strong Performance: Federal Bank’s shares have surged by 24% over the past month and over 350% in the last five years, showcasing its robust performance in the midcap banking segment.
– Investor Sentiment: The general sentiment around small and mid-cap private banks is optimistic, as they are more agile in responding to market dynamics.
Additionally, Rekha Jhunjhunwala has also expanded her holdings in Titan Company, acquiring another 15 lakh shares, bringing her total stake there to 5.3%. This continued commitment to key investments reflects her strategic approach, emphasizing her belief in the potential of both Federal Bank and Titan.
In conclusion, Rekha Jhunjhunwala’s recent actions highlight her confidence in the growth trajectory of Federal Bank, aligning with broader investment trends that favor midcap and small banking sectors in India.