In Short:
Mitsubishi UFG Financial Group (MUFG) has invested an additional ₹2,798 crore ($334 million) in DMI Finance, valuing it at $3 billion. This investment highlights growing interest in India’s digital financial services. DMI Finance plans to increase lending to small and medium enterprises and is open to acquisitions. The company has disbursed over ₹18,000 crore in loans and aims to expand its portfolio over the next 15-20 years.
Mitsubishi UFG Financial Group Makes Big Move in India!
Mumbai – The **Mitsubishi UFG Financial Group (MUFG)**, a towering figure in the Japanese banking landscape, has just made headlines by pouring in an impressive ₹2,798 crore (that’s a cool $334 million) into **DMI Finance Pvt. Ltd**. This significant investment is a clear reflection of the increasing investor enthusiasm in India, the second-largest economy in Asia.
Investing in Growth and Digitalization
In a statement, **MUFG** emphasized the massive potential of the Indian market. “India is a large market where rapid economic growth is expected, wherein the accelerated development of digital financial services is also foreseen due to the spread of the internet and various policies promoting digitalization.” This investment is strategically aimed at harnessing the growth opportunities within India’s thriving digital financial services sector.
Valuation and Shareholder Status
With this investment, **MUFG** has valued **DMI Finance** at a whopping $3 billion, positioning itself as the digital lender’s second-largest shareholder, right after **DMI Limited** from Mauritius.
A Big Bet: $565 Million So Far
Making this move through its subsidiary **MUFG Bank**, the Japanese banking giant has now invested a total of ₹4,712 crore (around $565 million) into **DMI Finance**, following a previous injection of $400 million last April.
Building Bridges Across Asia
Shivashish Chatterjee, co-founder of the **DMI Group**, shared his excitement: “We expect a lot of synergies, not just in India, but across our portfolio of companies. We’re collaborating with them across Southeast Asia for expansion and enhancing our products and services.” He added that they are on the lookout for “patient capital” to help them establish a robust book of loans ranging from ₹50,000-60,000 crore in the next 15-20 years.
The Lending Landscape of DMI Finance
Based in Delhi, **DMI Finance** is a digital-driven non-banking finance company that specializes in granting loans to both individuals and small businesses. As of March 2024, they have issued loans exceeding ₹18,000 crore.
Plans for Growth and Expansion
According to Chatterjee, **DMI Finance** aims to leverage this newfound capital to fortify its balance sheet. They are keen to increase their lending to small and medium enterprises from the current 10% up to 25% over the next 12-18 months. Plus, the company is open to exploring acquisition opportunities.
Focusing on MSMEs
Chatterjee stated, “We are looking to increase our MSME portfolio as there’s a structural need for greater credit to MSMEs.” He noted that growth in consumer loans for FY2025 is expected to slow down, which aligns with a natural market correction after a peak in consumer credit.
Recent Strategic Acquisitions
Over the past year, **DMI Finance** successfully acquired **Oxymoney**, a payments firm run by **Appnit Technologies Pvt. Ltd**, along with the **ZestMoney** platform.
Evolving Focus of DMI Group
Originally engaged in secured corporate lending to real estate builders, the **DMI Group** has shifted its focus towards small-ticket individual and affordable housing loans. As of March 31, 2024, their overall loan book, encompassing both **DMI Finance** and **DMI Housing Finance**, reached ₹14,550 crore, with retail consumer lending contributing a significant 84%.
Impressive Financial Performance
In FY24, **DMI Finance** reported a robust net profit of ₹417 crore, up from ₹320 crore the previous year. Capital adequacy stood strong at 44.8% as of March 31, 2024, compared to 50.9% a year prior.
