Fullerton India taps overseas market to raise Rs 2,795 Cr through ECB
Mumbai: Fullerton India Credit Company Ltd. (Fullerton India), one of the leading NBFCs in the country, announced today that it has successfully raised Rs 2,795 Crores ($ 350 mn), through the external commercial borrowing (ECB) route.
The Company has raised the loan at a margin of 122 basis point over the SOFR (Secured Overnight Financing Rate) for a tenor of 5 years from Sumitomo Mitsui Banking Corporation (SMBC) Singapore via parent route. The long tenor of the facility benefits the overall Asset Liability Management of the company. The past year has been transformative for the company as it became a consolidated subsidiary of Japan’s Sumitomo Mitsui Financial Group (SMFG), with SMFG acquiring 74.9% stake from Fullerton Financial Holdings (FFH). SMFG will eventually acquire 100% stake.
Mr. Shantanu Mitra, MD and CEO, Fullerton India, said, “Our FY22 performance echoes our deep commitment to innovate and serve each one of our customers with unique loan offerings, so they can fulfil their financing needs. This funding is fully hedged for foreign currency risks, and it is almost equivalent to the domestic cost of borrowing. The current ECB raised will enable us to diversify our funding base and tap offshore markets to fund future growth plans of the company.”
Over the last few years, Fullerton India has raised funds from various institutions like Asian Development Bank (ADB), International Finance Corporation (IFC) and major Banks in India.
Mr. Nobuyuki Kawabata, Senior Managing Executive Officer, Sumitomo Mitsui Financial Group and Chairman of Fullerton India, said, “This transaction reinforces our commitment towards Fullerton India. We believe this lending will play an important role to promote inclusive growth in line with our long-term strategy for India. SMFG is committed to supporting the growth plan of Fullerton India by leveraging its global relationship and providing funding support.”
About Fullerton India Credit Company (FICC)
Fullerton India Credit Company Limited is registered as an NBFC - Investment and Credit Company (NBFC-ICC) with the Reserve Bank of India, and a member of SMBC Group. FICC started its India operations in 2007 and has established a pan India presence – across 600 towns and 60,000+ villages through 633 branches and 12,500+ employees offering lending products to underserved & unserved retail and small business borrowers. By doing so, it has introduced people to formal credit.
FICC’s primary services constitute financing of SME for working capital and growth, loans for commercial vehicles and two-wheelers, home improvement loans, loans against property, personal loans, working capital loans for urban self-employed and loans for rural livelihood advancement, rural housing finance and financing of various rural micro enterprises.
Sumitomo Mitsui Financial Group (SMFG)
SMFG holds a 74.9% stake in Fullerton India Credit Company Limited and is the holding company of one of the largest global banking and financial service groups, offering a diverse range of financial services including commercial banking, leasing, securities and consumer finance with a heritage exceeding 400 years in Japan. SMFG is listed on the Tokyo and New York (via ADR) Stock Exchanges and has a market capitalization of approximately US$41.5 billion (as of 31 August 2022). SMFG is one of the global systemically important banks (G-SIBs) and has high credit ratings of A1 by Moody’s Investors Service and A- by Standard & Poor’s.
Fullerton Financial Holdings (FFH)
FFH holds a 25.1% stake in Fullerton India Credit Company Limited and is an independently operated strategic and operating investor in financial and related services in emerging markets. FFH creates shareholder value by building differentiated business models focused on the Mass Market and SME segments, and enabling digital innovation for its portfolio companies. FFH is a wholly-owned independent portfolio company of Singapore-headquartered investment company, Temasek. As at end December 2020, FFH’s portfolio includes investments in 6 countries with total Group assets of SGD 6.9 billion.