The Competition Commission of India has approved Blackstone’s proposal to acquire a 9.99 per cent stake in Federal Bank through warrants, clearing a key regulatory hurdle for the transaction, the fair-trade regulator said in a press release on Tuesday.

The acquisition will be executed through Blackstone’s arm, Asia II Topco XIII Pte. Ltd. Following the transaction, Blackstone will have the right to nominate a director to Federal Bank’s board, provided it maintains a minimum shareholding of 5 per cent.

The bank’s board had approved the strategic investment in October, which is set to result in a capital infusion of about Rs 61.97 billion. Federal Bank said the funds will strengthen its capital adequacy, support its next phase of organic and inorganic expansion, and help accelerate its ambition to rank among India’s top five private sector banks.

On Tuesday, shares of Federal Bank closed 1.5 per cent lower at Rs 265.10 on the NSE.