SMFG invests Rs 1,300 crore in its Indian unit to fuel NBFC growth

First fresh direct equity investment after 100% acquisition

Japanese financial services player Sumitomo Mitsui Financial group (SMFG) has invested Rs 1,300 crore in its Indian unit SMFG India Credit Company Ltd (formerly Fullerton India Credit Ltd) through rights issues for supporting the business growth of NBFC. This is the first fresh equity investment by SMFG into the Indian arm after the acquisition of 100 per cent stake from Fullerton.

Pankaj Malik, chief financial officer, SMFG India Credit Company (SMICC), in a statement said the strategic move underscores the commitment to fortify the company’s expansion efforts. Its capital adequacy ratio stood at 17.3 per cent at the end of December 2023, according to corporate presentation. In 2023, SMFG had invested Rs 600 crore in the perpetual debt which forms part of Tier-I capital.

In March 2024, SMFG completed its acquisition of the remaining 25.1 per cent equity stake in SMFG India Credit from the entity of Fullerton Financial Holdings Pte Ltd. As a result of the investment, SMICC will become a wholly-owned subsidiary of SMFG. In December 2021, SMFG completed a transaction to purchase 74.9 per cent of SMICC from Fullerton Financial Holdings (FFH).

SMICC’s Assets Under Management (AUM) stood at Rs 42,487 crore as of December 31, 2023, reflecting a year-on-year (Y-o-Y) growth of 24 per cent. The disbursements for the period April 2023 to December 2023 were Rs 28,790 crore reflecting a growth of 46 per cent Y-o-Y. The company has expanded its presence to 990 branches across the country, SMICC said in a statement.

Meanwhile, SMICC has invested Rs 150 crore in its wholly-owned subsidiary SMFG India Home Finance. This investment is expected to augment efforts for providing affordable housing finance solutions to the underserved population in the country.