Reliance Capital to sell 2.77% stake to Sumitomo Mitsui Trust Bank
26 December 2014
Reliance Capital, a company controlled by billionaire Anil Ambani, is offering a 2.77 per cent stake to Japan's fourth largest bank, Sumitomo Mitsui Trust Group, following a strategic alliance. The strategic alliance, apart from bringing in a host of service offerings, will enable the Indian company to set up a bank as and when regulations permit.
Sumitomo Mitsui Trust Bank, which is also Japan's fourth largest financial institution managing $682 billion in assets $1.8 trillion under custody as of September 2014, signed a long-term strategic alliance with Reliance Capital on Thursday.
As part of the agreement, Sumitomo Mitsui Trust Bank will take an initial 2.77 per cent stake in Reliance Capital valued at Rs371 crore through preferential allotment. This, however, has a lock-in period of one year.
The investment is being made at Rs530 per share, representing a premium of over 11 per cent to the stock price of relevant date of Reliance Capital.
''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 ADGG Group.
Reliance Capital intends to establish 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. The companies will collaborate in providing solutions for their clients, including in the area of M&A 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 are very pleased to be strategic alliance partners with Reliance Capital, which is one of India's leading financial institutions. 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.