SMFG infuses USD 350m into Indian NBFC arm
Sumitomo Mitsui Financial Group (SMFG) has made a significant capital investment of ₹3,000 crore in SMFG India Credit Corporation (SMICC) through a rights issue, demonstrating its strategic commitment to expanding its Indian operations.
Of this investment, ₹300 crore has been allocated to its wholly-owned subsidiary, SMFG India Home Finance. As of September 30, 2024, SMFG India Credit reported assets under management of ₹49,800 crore, representing a 25% year-over-year growth. This follows an earlier capital injection of ₹1,300 crore in April, marking the largest combined annual investment to date.
The latest capital infusion is expected to strengthen SMICC's Capital Adequacy Ratio (CAR), further solidifying its financial position. According to SMFG, this investment aligns with their strategy to support SMICC's expansion and promote broader financial inclusion across India.
Pankaj Malik, Chief Financial Officer of SMFG India Credit, stated that this investment reflects SMFG's confidence in both the Indian market's potential and SMICC's strategic vision. The strengthened capital foundation will enable the company to expand its operations and enhance its capacity to provide innovative financial solutions to a diverse customer base, while maintaining its commitment to financial inclusion and community development.
SMFG, headquartered in Tokyo, is recognized as a globally systemically important financial institution, offering comprehensive banking and financial services including commercial banking, leasing, securities, and consumer finance.
The company established its presence in India through the acquisition of a 74.9% stake in SMICC from Fullerton Financial Holdings in 2021, making it a consolidated subsidiary. Subsequently, SMFG acquired the remaining 25.1% stake from Angelica Investments for $700 million.
SMICC specializes in providing financial services including SME working capital and growth funding, commercial vehicle and two-wheeler loans, home improvement financing, property-backed loans, share-backed loans, personal lending, rural livelihood advancement loans, and rural micro-enterprise financing.
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