Japan’s Sumitomo Mitsui Trust Bank will acquire an initial 2.77% stake in Reliance Capital for $ 58.4 million (Rs 371 crore) through preferential allotment, with a lock-in period of one year.
“The investment is being made at Rs 530 per share representing a premium of over 11% to the stock price of relevant date of Reliance Capital,” said a release issued by Reliance Capital.
Reliance Capital also said that it intends to establish a new bank in India, with support of Sumitomo Mitsui Trust Bank as strategic partner, as and when the Reserve Bank of India’s (RBI) policies permit formation of the same.
Sumitomo Mitsui Trust Bank and Reliance Capital will collaborate in providing solutions for their clients, including inter alia in the area of M&A opportunities in India and Japan, and will assist each other in distribution of their respective financial products through their networks.
Reliance Capital will support clients of Sumitomo Mitsui Trust Bank in their supply chain financing and advisory needs in India.
Sumitomo Mitsui Trust Bank will support Reliance Group across its various listed group companies by providing wide range of financial and other services in Japan and Asia Pacific region.
“We believe Sumitomo Mitsui Trust will play an important role in the future of our company, through their all-round support and long standing experience, and will help accelerate our growth as we tap new opportunities and expand our existing businesses”, said Anil Ambani, Chairman, Reliance Group in the release.
Sumitomo Mitsui Trust Group is the fourth largest bank in Japan in terms of market capitalization and corporate loans and Japan’s largest financial institution managing assets of $ 682 billion with assets under custody of $ 1.8 trillion as of September 2014.
“We are particularly delighted to collaborate on a number of business initiatives that are proposed, and thereby contribute toward the development of the Indian financial industry through our collaboration with Reliance Capital, which we believe will be a very successful one”, said Hitoshi Tsunekage, president, Sumitomo Mitsui Trust Bank.
As on September 30, 2014, Sumitomo Mitsui Trust Group had total assets of $ 396 billion, total advances at $ 223 billion and net assets of $ 23 billion.