Sumitomo Mitsui Financial Group (SMFG) Makes Significant Investment in Indian Subsidiary

In a strategic move to strengthen its presence in the Indian financial market, Sumitomo Mitsui Financial Group (SMFG) has invested Rs. 3,000 crore into SMFG India Credit through a rights issue. A notable portion of this investment, Rs. 300 crore, has been allocated to its subsidiary, SMFG India Home Finance. This marks the highest capital infusion by SMFG India Credit in the current financial year, totaling Rs. 4,300 crore.

Enhanced Capital Base to Drive Growth and Innovation

As of September 30, 2024, SMFG India Credit's assets under management (AUM) have seen a remarkable 25.1% year-on-year growth, reaching Rs. 49,800 crore. Following this latest investment, the company anticipates a further strengthening of its capital adequacy ratio (CAR). Pankaj Malik, Chief Financial Officer of SMFG India Credit, emphasized the investment as a testament to SMFG's confidence in the Indian market's growth potential and the company's vision to scale operations and offer innovative financial solutions to a diverse customer base.

SMFG's Strategic Expansion in India

SMFG's journey in the Indian financial sector began with the acquisition of a 74.9% stake in Fullerton India Credit in July 2021, which was later renamed SMFG India Credit. This acquisition was a pivotal step for SMFG, providing access to a retail finance platform crucial for its expansion across Asia. Today, SMFG India Credit operates extensively across India, offering a wide range of financial services aimed at driving financial inclusion and empowering underserved communities.

Looking Ahead: The Future of NBFC Sector in India

The Non-Banking Financial Company (NBFC) sector is expected to witness a growth of 21-23% in FY2024, with a projected moderation in AUM growth to 13-15% in FY2025. Despite the anticipated slowdown, SMFG India Credit remains committed to its mission of providing accessible financial services, including SME loans, vehicle financing, and affordable housing loans, through its vast network of branches across India.