Sumitomo Mitsui Financial Group (SMFG) of Japan announced on Thursday, December 26, that it has made a capital infusion of ₹3,000 crore in India subsidiary SMFG India Credit Co Ltd (SMICC) through a rights issue to expand business. This investment also includes ₹300 crore for its wholly-owned subsidiary, SMFG India Home Finance Co. Ltd (SMFG Grihashakti).
SMFG infused ₹1,300 crore in SMICC (formerly Fullerton India Credit Co Ltd) through a rights issue in April 2024. With the latest capital infusion of ₹3,000 crore, SMFG India Credit Co Ltd has received the highest-ever fund infusion of a record ₹4,300 crore for any financial year since inception.
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SMFG India fund boost
The strategic investment, it said, reflects SMFG’s 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, showcasing a year-on-year growth of 25.1 per cent. After this infusion, SMICC’s Capital Adequacy Ratio (CAR) is expected to strengthen further.
Meanwhile, SMFG India Credit (SMICC) was awarded an international credit rating of “AA-” with a stable outlook by the Japan Credit Rating Agency (JCR). This outcome places SMICC four notches above India’s sovereign rating and only one notch below its parent financial group SMFG’s “AA” rating. JCR highlighted SMICC’s strategic importance to SMFG’s Asia Multi-Franchise Strategy.
Pankaj Malik, Chief Financial Officer of SMFG India Credit, said, “This AArating by JCR is a testament to SMFG India Credit’s commitment to maintaining financial discipline, operational excellence, and customer-centric growth through innovative product offerings.” JCR also observed that SMICC’s business scale has grown significantly, driven by the expansion of the domestic consumer credit market and strong support from SMFG.
Together with its subsidiary, SMFG India Home Finance Co. Ltd, also known as SMFG Grihashakti, has established a pan-India presence, across 670 towns and 70,000 villages through 1000 branches and 25,000 employees offering lending products to underserved and unserved retail and small business borrowers.
