Sumitomo Mitsui Trust Bank acquires stake in Reliance Capital

Japanese Sumitomo Mitsui Trust Bank Limited has acquired a 2.77 percent stake in India's Reliance Capital for Rs.371 crore, the latter said on Thursday.

In a statement issued here, Reliance Capital - part of the Anil Ambani-led Reliance group - said the entire proceeds of Rs.371 crore ($58.4 million) has been received from Sumitomo Mitsui Trust Bank.

The Japanese bank acquired the stake through a preferential allotment with a one year lock-in period.

Sumitomo Mitsui Trust Bank had agreed to acquire strategic stake in Reliance Capital subject to regulatory and shareholders approvals, which have since been received, Reliance Capital said.

"The investment has been made at Rs.530 per share representing a premium of over 11 percent to the stock price of relevant date of Reliance Capital," the statement noted.

Sumitomo Mitsui Trust Group is the fourth largest bank in Japan (in terms of market capitalization and corporate loans) and Japan's largest financial institution managing assets of $682 billion with assets under custody of $1.8 trillion as of September 30, 2014.

"We welcome Sumitomo Mitsui Trust as our strategic partner in Reliance Capital. We are confident of accelerating our growth and tap new opportunities with the help of SMTB's (Sumitomo Mitsui Trust Bank) long standing experience and support" Sam Ghosh, CEO, Reliance Capital was quoted as saying in the statement.

As part of the agreement, Reliance Capital intends to establish a new Bank in India, with support of Sumitomo Mitsui Trust Bank as strategic partner, as and when RBI's policies permit formation of the same.

Both companies will also collaborate in providing solutions for their clients, including inter alia in the area of mergers and acquisitions (M&A) opportunities in India and Japan, and will assist each other in distribution of their respective financial products through their networks.

Reliance Capital will also support clients of Sumitomo Mitsui Trust Bank in their supply chain financing and advisory needs in India.

Sumitomo Mitsui Trust Bank will support Reliance Group across its various group companies by providing wide range of financial and other services in Japan and Asia Pacific region.