Japanese giant Sumitomo injects ₹3,000 cr in SMFG India, sets ₹4,300 cr record

Sumitomo Mitsui Financial Group, Inc. (SMFG) has made another ₹3,000 crore equity infusion in NBFC SMFG India Credit Co. Ltd., formerly Fullerton India Credit Co. Ltd. (SMICC), via a rights issue. The investment also includes ₹300 crore directed towards its wholly-owned subsidiary, SMFG India Home Finance Co. Ltd., earlier known as Fullerton India Home Finance (SMFG Grihashakti).

The current equity infusion comes after SMFG in April 2024 had infused ₹1,300 crore in SMICC via rights issue. With this latest capital infusion of ₹3,000 crore, SMICC has received the highest-ever fund infusion of ₹4,300 crore for any financial year since inception, says the company. "This strategic investment reflects SMFG’s unwavering focus on supporting SMICC’s growth trajectory and enhancing financial inclusion across the Nation."

As of September 30, 2024, SMICC’s asset under management (AUM) stood at ₹49,800 crore, a year-on-year growth of 25.1%. Post this infusion, SMICC’s capital adequacy ratio (CAR) is expected to strengthen further, reinforcing the company’s robust financial foundation. CAR ensures a financial institution has enough cushion to absorb potential losses in a company without endangering its financial position. It shows a company is well-capitalised, reducing the risk of default.

Pankaj Malik, Chief Financial Officer, SMFG India Credit says the fund infusion shows the confidence that SMFG places in the growth potential of the Indian market and SMFG India Credit’s vision. "The enhanced capital base not only allows us to scale our business operations but also solidifies our ability to serve a diverse customer base with innovative financial solutions. As we continue to expand, our focus remains steadfast on driving financial inclusion and empowering underserved communities across the country.”

Japan-based SMFG is one of the largest global banking and financial service groups listed on the Tokyo and New York (via ADR) Stock Exchanges and has a market capitalisation of $77.5 billion. Its India unit, SMICC, operates across 828 branches in India and offers lending products to retail and small business borrowers. Its services constitute financing of SME for working capital and growth, loans for commercial vehicles and two-wheelers, home improvement loans, loans against property, and financing of various rural micro-enterprises. SMFG India Home Finance an SMICC subsidiary, which offers housing loans to salaried and self-employed individuals along with finance to mid-tier developers, and operates across 179 locations.