SMFG India Credit, which is majority-owned by Japan’s Sumitomo Mitsui Financial Group (SMFG), has raised around $72 million in its first Perpetual Debt Instrument (PDI) from Sumitomo Mitsui Banking Corporation (SMBC), Tokyo.
The long-term funding seeks to strengthen SMFG India Credit’s asset-liability profile and shore up its Tier-I capital base, according to a release.
SMFG holds a 74.9% stake in SMFG India Credit, which was formerly known as Fullerton India Credit.
“The capital infusion, through PDI, demonstrates our parent’s firm commitment towards SMFG India Credit’s growth journey. With this issuance, the capital adequacy ratio improves by around 160 bps. Since these bonds are perpetual, the issuance also strengthens the asset-liability profile,” said Pankaj Malik, CFO, SMFG India Credit.
SMFG India Credit Co is a registered Non-Banking Financial Corporation-Investment and Credit Company (NBFC-ICC).
The firm started its India operations in 2007 and has established a pan-India presence across 600 towns and more than 65,000 villages through 769 branches.
SMFG India Credit’s primary services constitute financing of SMEs for working capital and growth, loans for commercial vehicles and two-wheelers, home improvement loans, loans against property, loans against shares, personal loans, working capital loans for urban self-employed and loans for rural livelihood advancement and financing of various rural microenterprises.
Fullerton Financial Holdings, a subsidiary of Singapore’s Temasek Holdings holds a 25.1% in SMFG India Credit.