ICRA places Shriram Fin rating 'on watch with positive implications'
This story was originally published at 20:48 IST on 31 December 2025
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NEW DELHI – ICRA Ltd. has revised Shriram Finance Ltd.'s long-term rating outlook to "on watch with positive implications" from "stable", the non-banking finance company said in an exchange filing Wednesday. The rating agency mantained the company's fixed deposit and non-convertible debenture programme rating at "AA+".
The rating action comes after the announcement earlier this month that Japan's MUFG Bank Ltd. will invest INR 396.18 billion in Shriram Finance to buy 20% stake in the non-banking finance company. MUFG Bank's stake purchase in Shriram Finance marks the largest foreign direct investment in a financial services company in India. The stake purchase is also the biggest investment for MUFG Bank's parent entity, Mitsubishi UFJ Financial Group, in India.
"This transaction will significantly improve SFL's (Shriram Finance's) capitalisation profile, providing sizeable buffer for growth and for managing volatility in its asset quality, given the target asset class/borrower profile," ICRA said. "This, in turn, shall strengthen its credit risk profile, leading to an improvement in its financial flexibility and earnings performance."
The investment from MUFG Bank is also expected to improve the company's cost of funding, which has remained higher than peers, while improving its liabilities franchise, it said. However, it noted that the rating remains constrained by Shriram Finance's moderate, albeit improving, asset quality, given its modest borrower profile.
Shriram Finance had reported a net profit of INR 23.07 billion for the September quarter on a total income of INR 119.17 billion. Wednesday, shares of Shriram Finance ended at INR 996.20 on the National Stock Exchange, up 1.7%. End
Reported by Pratiksha
Edited by Rajeev Pai
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