Japan’s Sumitomo to buy Fullerton India for Rs 19,300 crore – Times of India

MUMBAI: Sumitomo Mitsui Financial Group, the Japan headquartered global financial major, is buying out Fullerton India, the Indian non-banking financial arm of Singapore-based Fullerton Financial, for about $2.6 billion, or nearly Rs 19,300 crore.
This is the largest Japanese buyout in the Indian financial services space. Moreover, this is the first time that a Japanese firm is getting into general retail lending in India.

Initially, Sumitomo will buy 74.9% in Fullerton India and the balance 25.1% at a later date, a release from the company being acquired said. Although both the companies did not disclose the deal value, sources said Sumitomo will pay $2 billion initially for the nearly 75% stake in Fullerton’s India arm, and the balance once it becomes a fully owned subsidiary.
Japan is one of the top investors in India. According to government data on foreign direct investments (FDIs) into the country, between 2000 and 2021, Japanese companies had invested $35.4 billion, making it the fifth largest contributor of funds from abroad for this period. Over 1,000 Japanese companies currently operate in India, industry sources said.
In the manufacturing space, Suzuki (in Maruti Suzuki), Toyota (in Toyota Kirloskar Motors), Honda and Sony are large Japanese conglomerates having substantial presence in India. Also, Bank of Tokyo Mitsubishi, Mizuho Corporate Bank and Sumitomo Mitsui Financial Group have presence in India’s corporate banking space.
In the financial services space, global insurance major Nippon Life is one of the largest FDI contributors.
Mitsui Sumitomo is a minority shareholder in Max Life Insurance. Veterans in financial services space said Sumitomo’s entry into the NBFC sector is a major step for a Japanese company. “There are thousands of NBFCs in the country. Some Japanese companies may have some presence through minority stakes, but Sumitomo’s entry through this (Fullerton) deal is the biggest,” said a financial services sector analyst.
At present, unlisted Fullerton India offers auto, personal and business loans, mortgage finance, loans against properties and securities. Through this buyout, the Japanese major intends to leverage Fullerton India’s “expertise in serving mass-market consumers and MSME customers in India”. Citigroup, Cyril Amarchand Mangaldas, and Allen & Overy were financial and legal advisers to Fullerton Group in this deal.