Japan’s Sumitomo Mitsui Financial Group plows $350 mn into India arm

Japan’s Sumitomo Mitsui Financial Group (SMFG) has plowed $350 million (about Rs3,000 crore) into its Indian non-banking finance subsidiary SMFG India Credit through a rights issue, the company said on Thursday.

With the fresh capital, the total investment in SMFG India Credit is currently at Rs4,300 crore (about $500 million) this fiscal year.

About Rs300 crore from the new capital will be reserved for SMFG India Home Finance, a wholly-owned subsidiary, the company said, adding that it plans to improve its capital base and support expansion efforts across India.

The fresh capital will also bolster SMFG India Credit’s capital adequacy ratio, it added.

“This strategic investment reflects SMFG’s unwavering focus on supporting SMFG India Credit’s growth trajectory and enhancing financial inclusion across the nation,” the company said in a statement.

SMFG India Credit, which began operations in 2007, provides financial services to small and medium enterprises (SMEs) and rural micro-enterprises.

Its offerings include working capital loans, vehicle and personal loans, and home improvement financing. As of September, the company’s loan book stood at Rs 49,800 crore.

Pankaj Malik, chief financial officer of SMFG India Credit, said that the company’s has its presence across 670 towns and 70,000 villages through 828 branches and 22,000 employees.

“This fund infusion demonstrates 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,” Malik said.

SMFG, headquartered in Japan and listed on the Tokyo and New York stock exchanges, is among the world’s largest financial groups, offering services in banking, leasing, securities, and consumer finance.