SMFG India Credit Company to get up to Rs 2,000 crore capital from parent

Slated to become upper layer NBFC with listing plans

SMFG India Credit Company Ltd is looking at a capital infusion of up to Rs 2,000 crore from its parent—Japanese financial services group SMFG—till 2026 to support future growth in India.

The business plans factor in possible inclusion in the upper layer list of finance companies, requiring the listing of equity shares on bourses. Its assets under management (AUM) stood at Rs 46,500 crore by June 2024 and are expected to cross Rs 60,000 crore of AUM by the end of March 2025.

Shantanu Mitra, managing director and chief executive, SMFG India Credit, said the capital estimates are based on the current assessment. The company expects to become self-funding (capital) from 2027 onwards. The previous round of capital infusion (Rs 1,300 crore) was in April 2024.

“We expect to soon become an upper layer NBFC and realise we have to list in three years. It is in the back of the mind,” Mitra said in a media interaction on the sidelines of an event to mark the branch network reaching the 1,000 mark. Its capital adequacy ratio stood at 19.1 per cent as of June 2024.

The expansion of the branch network has been a strategic priority, with around 300 branches added in the past two years, 95 per cent of which are located in Tier-2 cities and rural areas.

Referring to the growth outlook, Mitra said the growth in assets is expected to be 25-30 per cent year-on-year basis. While unsecured credit is over 60 per cent and secured loans the rest, the unsecured piece will have a 50 per cent share over the period.

The Reserve Bank of India (RBI) has rightfully cautioned about the high growth in unsecured credit. The company has already tightened underwriting standards. It does not have a presence in the bracket of below Rs 50,000 loans where the stress is more.

As for broad-basing sources of funding, he said the finance company is going in for international credit rating to raise funds from the global market to diversify sources of money. At present, banks have a 55 per cent share in funding, 15 per cent comes from external commercial borrowings, and the balance from the capital market.