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MUFG Bank To Invest Rs 39,600 Crore In Shriram Finance Via Preferential Issue
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MUFG Bank is India’s second-largest retail NBFC by AUM and says the capital infusion would significantly strengthen its balance sheet and support its next phase of growth.
Shriram Finance says the partnership will combine its extensive domestic franchise and distribution network with MUFG’s global banking expertise and financial strength.
MUFG Bank will invest Rs 39,618 crore (about $4.4 billion) in Shriram Finance through a preferential issuance of equity shares, marking the largest foreign direct investment in an Indian financial services company.
Shriram Finance said its board has approved entering into definitive agreements with MUFG Bank for the transaction, which will result in the Japanese lender acquiring a 20 per cent stake in the NBFC on a fully diluted basis. The proposed investment is subject to shareholder approval, regulatory clearances and other customary closing conditions.
The deal is being seen as a major endorsement of India’s lending sector and Shriram Finance’s scale and business model. The company is India’s second-largest retail NBFC by assets under management and said the capital infusion would significantly strengthen its balance sheet and support its next phase of growth.
Shriram Finance said the partnership will combine its extensive domestic franchise and distribution network with MUFG’s global banking expertise and financial strength. The investment is expected to improve access to low-cost funding, potentially support credit ratings and bring global best practices in governance, technology and operations. The collaboration is also expected to unlock synergies in innovation and customer engagement, supporting sustainable long-term growth.
MUFG Bank’s parent, Mitsubishi UFJ Financial Group, has been present in India for over 130 years and has invested about $1.7 billion in the country so far, creating employment for nearly 5,000 people. The investment in Shriram Finance will be MUFG’s largest exposure in India to date, underlining its commitment to the country’s financial inclusion and growth story.
Umesh Revankar, executive vice-chairman of Shriram Finance, described the transaction as a milestone for the company. “This transaction marks a defining moment in our growth journey. MUFG is one of the largest financial institution, with an extensive international network and strong values rooted in substantial growth and financial inclusion. The entry of MUFG as a key investor reinforces global confidence in India’s financial services sector and our role as a leader within it,” he said. “Together, we aim to strengthen our capabilities, drive economic progress, and create meaningful impact across communities, building a future-ready institution anchored in trust and good governance.”
Hironori Kamezawa, group chief executive officer of Mitsubishi UFJ Financial Group, said MUFG views the investment as a strategic partnership. “MUFG is proud to enter into this transaction and become a strategic partner of Shriram Finance, one of India’s most respected financial institutions. MUFG and Shriram Finance share a common vision and aligned values for the future,” he said. “Leveraging our global capabilities, MUFG is committed to supporting Shriram Finance’s growth and contributing to economic development, communities, and society in India.”
Shriram Finance is the flagship company of the Shriram Group, with businesses spanning credit, insurance, asset management, wealth management, asset reconstruction, stock broking and distribution. Established in 1979, the NBFC focuses on financing small road transport operators and small business owners, and is a market leader in organised financing of pre-owned commercial vehicles and two-wheelers. The company has assets under management of over Rs 2.81 lakh crore, operates through more than 3,200 branches, employs nearly 79,000 people and serves close to 9.7 million customers.
Shares of Shriram Finance on Monday jumped 3.68% to Rs 934.85 apiece on the NSE, compared with the previous close of Rs 901.7. The stock has surged nearly 10% in the past one week.
December 22, 2025, 17:15 IST
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