More Stories

Informist, Thursday, Jan. 15, 2026

 

--S&P ups Shriram Finance's long-term rating to BBB-; outlook stable 

 

MUMBAI – S&P Global Ratings Thursday raised its long-term credit rating on Shriram Finance Ltd. to 'BBB-' from 'BB+' with a 'stable' outlook, the company said in a filing. The rating agency also raised the finance company's short-term credit rating to 'A-3' from 'B'. S&P also raised the rating on the company's senior secured debt to 'BBB-' from 'BB+'.

 

The capital infusion by MUFG Bank into Shriram Finance is the key driver of the upgrade in ratings, as it will likely strengthen the finance company's capitalisation, the rating agency said. In December, Shriram Finance said MUFG Bank would invest INR 396.18 billion to acquire a 20% stake in the company.

 

The non-banking finance company's risk-adjusted capital ratio will likely exceed 20% in 2026-27 (Apr-Mar) and FY28, compared with the earlier expectation of 13.75-14.75%, S&P said. 

 

Driven by access to cheaper borrowing through its association with MUFG Bank, the non-banking finance company will likely report a gradual rise in its net interest margin to 8.5% from 8.3% and a rise in its return on assets to 3.3% from 3.05% over the next two years, the rating agency said. The cost of borrowing for the non-banking finance company will likely fall 10-30 basis points following the association.

 

"The stable rating outlook reflects our expectation that Shriram Finance will benefit from its robust capitalisation and strong market position in vehicle financing," the rating agency said. "We also anticipate gradual funding benefits from its association with MUFG Bank over the next two years."

 

The rating agency could downgrade Shriram Finance's ratings if asset quality deteriorates significantly, which could strain its liquidity and funding. On the other hand, if the finance company can secure funding at competitive costs and demonstrate a stable improvement in its funding profile, along with strengthened ties with MUFG Bank through a larger controlling stake acquisition, the rating can be upgraded.

 

In the September quarter, Shriram Finance reported a net profit of INR 23.07 billion, up 11% year on year. On Wednesday, the company's shares closed at INR 981.10 on the National Stock Exchange, up 0.2% from Tuesday.  End

 

Reported by Janwee Prajapati

Edited by Saji George Titus

 

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.