In a move to foray into the banking sector, Reliance Capital has entered into a long-term strategic alliance with Japan’s Sumitomo Mitsui Trust Bank. As part of the agreement, the Indian company will allot a 2.77 per cent stake valued at Rs 371 crore through a preferential allotment with a one year lock-in period.
The allotment is being made at Rs 530 per share, an 11 per cent premium to the stock price of Reliance Capital, the company said in a statement.
“We whole-heartedly welcome Sumitomo Mitsui Trust as our strategic partner in Reliance Capital. 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 of Reliance Group.
Sumitomo Mitsui Trust Group is the fourth-largest bank in Japan by market capitalisation 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 successful one,” said Hitoshi Tsunekage, President, Sumitomo Mitsui Trust Bank.
Reliance Capital intends to set up a new bank in India, with support of Sumitomo Mitsui Trust Bank as strategic partner, as and when RBI’s policies permit formation of the same, it said.
The companies will also collaborate in providing solutions for their clients, including in the area of M&A opportunities in India and Japan. The companies will assist each other in distribution of their respective financial products through their networks, it added.