SMFG Invests Rs. 1,300 Crore in Indian Unit to Accelerate NBFC Growth

Sumitomo Mitsui Financial Group (SMFG), a leading Japanese financial services company, has invested Rs 1,300 crore into its Indian subsidiary, SMFG India Credit Company Ltd (formerly known as Fullerton India Credit Ltd), through a rights issue. This significant capital injection aims to bolster the non-banking financial company's (NBFC) growth and support its expansion in India. This marks the first fresh equity investment by SMFG in its Indian arm since acquiring 100 percent ownership from Fullerton.

Pankaj Malik, Chief Financial Officer at SMFG India Credit Company (SMICC), stated that the new investment demonstrates SMFG's commitment to strengthening the Indian unit's growth trajectory. As of December 2023, the capital adequacy ratio for SMICC stood at 17.3 percent, as per a corporate presentation. Earlier in 2023, SMFG had invested Rs 600 crore in perpetual debt, contributing to the company's Tier-I capital.

In March 2024, SMFG completed the acquisition of the remaining 25.1 percent equity stake in SMICC from Fullerton Financial Holdings Pte Ltd, making SMICC a wholly-owned subsidiary of SMFG. This followed SMFG's initial transaction in December 2021, where it purchased 74.9 percent of SMICC from Fullerton Financial Holdings (FFH).

SMICC's Assets Under Management (AUM) were reported at Rs 42,487 crore as of December 31, 2023, showing a year-on-year growth of 24 percent. From April to December 2023, disbursements reached Rs 28,790 crore, reflecting a remarkable 46 percent year-on-year growth. Additionally, the company has expanded its branch network to 990 locations across India.

In parallel with the growth of its NBFC operations, SMICC has invested Rs. 150 crore in its wholly-owned subsidiary, SMFG India Home Finance. This strategic investment is expected to support the provision of affordable housing finance solutions to India's underserved population, underscoring SMFG's focus on social and economic development through inclusive financial services.

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