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Shriram Finance has received board approval to sell a 20 per cent stake to Japan-based MUFG Bank through a preferential equity issuance worth around INR 39,618 crore (USD 4.4 billion). The investment, which requires shareholder and regulatory approvals, marks one of the largest foreign direct investment inflows in India's financial services sector. The partnership is expected to boost Shriram Finance's capital base, enhance its balance sheet, improve access to low-cost liabilities, and unlock synergies in technology and customer engagement, while aligning governance with global standards and supporting long-term growth.
Shriram Finance has announced that its board has approved the sale of a 20 per cent stake to MUFG Bank, a Japan-based financial institution, through a preferential issuance of equity shares valued at around INR 39,618 crore (USD 4.4 billion). According to the company, this transaction would be among the largest foreign direct investments in India's financial services space. Advertisement
The investment will allow MUFG Bank to acquire a 20 per cent stake on a fully diluted basis, Shriram Finance stated in a regulatory filing. The signing of definitive agreements reflects confidence in the fundamentals and growth potential of India's lending and financial services sector. The move is also expected to strengthen Shriram Finance's capital base and accelerate its growth plans.
The proposed deal remains subject to approvals from shareholders, regulatory clearances, and other customary conditions before it can be completed. Shriram Finance emphasized that the collaboration will combine its strong domestic presence and extensive distribution network with MUFG Bank's global expertise and financial capabilities. The infusion of funds is expected to significantly improve capital adequacy, reinforce the balance sheet, and provide growth capital for long-term expansion.
Beyond capital support, the partnership is anticipated to create synergies in technology, innovation, and customer engagement, driving sustainable growth. The deal is also likely to provide better access to low-cost funding, potentially enhance credit ratings, and align governance and operational practices with international standards.
Source PTI
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