Archive · 23 Dec 2025
MUFG Invests ₹39,618 Crore in Shriram Finance
Shriram Finance, a big Indian company that gives loans, has received a huge investment from a Japanese bank called MUFG.
This investment is the largest foreign investment in an Indian financial company.
MUFG will own 20% of Shriram Finance and will help it grow bigger and stronger.
The money will make Shriram Finance's balance sheet better and might lead to a higher credit rating, which means it can borrow money at lower costs.
Shriram Finance plans to use this money to open more branches and give more loans to people who need them.
The company's shares went up by 3.7% on the day the investment was announced.
MUFG Bank is investing ₹39,618 crore in Shriram Finance through a preferential issuance of equity shares, acquiring a 20% stake.
The investment is subject to shareholder approval, regulatory clearances, and other customary closing conditions.
The capital infusion is expected to enhance Shriram Finance's capital adequacy ratio to 31% from 20.68%, supporting growth and potentially leading to a credit rating upgrade.
Shriram Finance plans to use the capital to accelerate expansion in core segments like CV and MSME lending, opening 100 new branches per year and converting rural centers into full-fledged branches.
The investment is seen as a major endorsement of India's lending sector and Shriram Finance's scale and business model, with brokerages predicting significant upside potential.
- Who
- Shriram Finance Limited (SFL) and MUFG Bank
- What
- MUFG Bank is investing ₹39,618 crore in Shriram Finance through a preferential issuance of equity shares, acquiring a 20% stake
- When
- The investment was announced on December 22, 2025, with shares surging 3.7% on the same day
- Where
- India, with Shriram Finance operating over 3,200 branches nationwide
- Why
- The investment aims to strengthen SFL's balance sheet, support growth, enhance capital adequacy, and potentially lead to a credit rating upgrade
- Investment Amount
- ₹39,618 crore (about $4.4 billion)
- Investor
- MUFG Bank
- Issue Price per Share
- ₹840.93
- MUFG's Stake
- 20%
- Promoter Stake Post-Issuance
- 20.3%
- Public Stake Post-Issuance
- 60%
- Capital Adequacy Ratio (Post-Investment)
- 31%
- Current Capital Adequacy Ratio
- 20.68%
- Expected Rating Upgrade
- From AA+ to potentially AAA
- Expected Cost of Borrowing Reduction
- 50-70 basis points
- Shriram Finance AUM
- Over ₹2.81 lakh crore
- Number of Branches
- Over 3,200
- Number of Employees
- Nearly 79,000
- Number of Customers
- Close to 9.7 million
- Share Price Increase
- 3.7% to ₹934.80 on NSE
Sources
Shriram Capital’s bank license aspirations get a boost with MUFG backing
Shriram Finance: MUFG could soon be in driver's seat
Shriram Finance surges as MUFG seals Rs 39,620 cr deal: 3 reasons why Motilal, Jefferies, Nomura see up to 26% upside
Shriram to retain board, management control at Shriram Finance after MUFG deal
MUFG Bank says it will not raise Shriram Finance stake beyond 20%
No plans to become a universal bank, says Shriram Finance’s Revankar
MUFG Bank To Invest Rs 39,600 Crore In Shriram Finance Via Preferential Issue
MUFG's ₹39,618 Crore Stake In Shriram Finance To Boost CRAR To 31%, Enabling Cheaper Borrowing
Shriram Finance rules out banking license plans after MUFG investment — Check details
“We don’t aspire to become a bank, just yet,” Shriram Finance CEO says
‘MUFG deal a huge endorsement of India’s progress’: Shriram Finance
Mission and vision match led to Shriram Finance-MUFG deal, says MUFG official
Analysts see Shriram Finance entering faster growth phase after MUFG deal
“We don’t aspire to become a bank, just yet,” Shriram Finance CEO says
