Japan’s Sumitomo Mitsui Trust Bank buys stake in Indian PE firm

Sumitomo Mitsui Trust Bank bought a minority stake in an Indian private equity firm and will anchor its first fund, in the latest expansion by a Japanese firm into India’s fast-growing financial services sector.

One Planet Partners expects to deploy about 30 billion rupees ($315 million) over the next five years in assets including energy transition, mobility and manufacturing, the founding partners in the fund said in an interview.

The investment underscores Japanese institutional investor interest in Indian companies across financial services, manufacturing and real estate. Over the last year, large Japanese banks such as Sumitomo Mitsui Financial Group and Mizuho Financial Group have acquired stakes in Indian firms in an unprecedented investment push into the country.

“There is a lot of appreciation in the fact that at a time when everything seems to be souring in many markets, whether it is geopolitics or security issues, India is still growing 7%,” Mukund Rajan, a founding partner said. “That kind of growth is impressive and people are taking bets as the Japanese indeed are.”

One Planet was founded in 2024 by Rajan and former Tata Group colleague Bobby Pauly, along with former McKinsey Senior Partner Mrinalini Mirchandani and former Blackstone executive Sheetal Thakkar.

India is a compelling long-term investment destination and the bank will build “a long-term partnership across asset classes,” Kazuya Yoneda, general manager in the equity investment department said in a statement.

One Planet expects to tap other Japanese and Asian investors for capital, besides raising money from Indian institutional investors, said Thakkar.

The firm will back Indian mid-market firms where institutional capital is under represented. Venture capital targets early stage companies, while large buyout funds tend to make big bets, according to Mirchandani.

“We think there is a missing middle, and a fund like ours can be the bridge between both sides of the bar bell,” Mirchandani said.

The company will invest $25 million to $75 million in real assets across its target sectors. The firm made its first investment in August in mobility business Yulu Bikes.

One Planet is raising capital as some global investors express concern about the steep erosion in the rupee and exited the market because of opportunities in artificial intelligence in the U.S. and other geographies.

Pauly said that the firm will aim for a 25%-30% gross return to “tide over the depreciation of the rupee” for international investors, and will look at backing export-led firms that earn in foreign currencies.

The firm has also tapped advisers such as former Tata Group executive Raju Bhinge, former Tata Power Chief Financial Officer Ramesh Subramanyam and former private equity head at Mitsubishi Riki Kojima, according to Rajan.