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Informist, Friday, Dec. 19, 2025

 

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--Shriram Finance approves fund raise of INR 396.18 bln from MUFG Bank 
--MUFG Bank to buy 20% stake in Shriram Finance at INR 840.93 per share 
--MUFG Bank to buy stake in Shriram Finance through pref issue 
--MUFG Bank can appoint 2 non-independent directors on Shriram Finance board 
--Shriram Fin promoter Shriram Capital to mull restructuring of lending ops

 

NEW DELHI – MUFG Bank Ltd. will invest INR 396.18 billion in Shriram Finance Ltd. to buy 20% stake in the Indian non-banking financial company. Shriram Finance Friday said its board had approved raising funds from the Japanese bank through a preferential issuance of equity shares.

 

At 1250 IST, shares of Shriram Finance were at INR 897.00 on the National Stock Exchange, up 3.2%.

 

MUFG Bank's stake purchase in Shriram Finance marks the largest foreign direct investment in a financial services company in India. The stake purchase will also be the biggest investment for MUFG Bank's parent entity, Mitsubishi UFJ Financial Group, in India.

 

"This collaboration combines SFL's (Shriram Finance) established domestic franchise and extensive distribution network with MUFG Banks's global expertise and financial strength," the Indian NBFC said in a release. "The fund infusion will significantly enhance SFL's capital adequacy, strengthen its balance sheet, and provide long-term growth capital."

 

MUFG Bank will buy 471.12 million shares in Shriram Finance at INR 840.93 per share. The Japanese bank can nominate up to two non-independent directors on Shriram Finance's board.

 

Shriram Finance's promoter Shriram Capital will explore restructuring of its holdings in various businesses. Shriram Capital will also consider the separation or reorganisation of the lending business from its other business interests.

 

"We understand that the aforesaid possible restructuring is only at a preliminary and exploratory stage," Shriram Finance said in an exchange filing. "No final decision, commitment, or approval has been taken by the board of SCPL (Shriram Capital) in respect of any specific structure, transaction or timeline and is subject to detailed evaluation, definitive approvals, and compliance with applicable laws."

 

MUFG Bank will have to pay a one-time, non-compete and non-solicit fee of $200 million to Shriram Ownership Trust, a major shareholder of Shriram Finance.

 

Shriram Finance reported a net profit of INR 23.07 billion for the quarter ended September on total income of INR 119.17 billion.  End

 

US$1 = INR 90.22

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Shubham Rana

Edited by Avishek Dutta

 

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