MUMBAI, Dec. 20 -- Mitsubishi UFJ Financial Group (MUFG) is set to invest Rs.39,618 crore ($4.4 billion) for a 20% stake in Shriram Finance Ltd, marking one of the largest cross-border transactions this year and adding to the growing pipeline of deals in the India-Japan corridor. Shriram Finance shares climbed to a 52-week high. The investment will be made through a preferential issuance of equity shares, Shriram Finance (SFL) said in a filing with the stock exchanges on Friday. The fund infusion will enhance SFL's capital adequacy, strengthen its balance sheet, and provide long-term growth capital, the company said in the filing. This collaboration is expected to unlock synergies in technology, innovation, and customer engagement, driving sustainable growth while improving access to low-cost liabilities, SFL said. The transaction combines SFL's established domestic franchise and extensive distribution network with MUFG Banks's global expertise and financial strength. Mint reported on 17 December that MUFG plans to invest $4.5 billion-5 billion for a 20% stake in SFL, valuing the company at $22 billion-25 billion. Shriram notified the stock exchanges about the board meeting on Friday to discuss a proposal to raise funds through a rights issue, preferential allotment, qualified institutional placement, or any other mode. MUFG's investment in SFL has added to the momentum of activity in the financial services space in the Indo-Japan corridor. Notable transactions this year include Mizuho's majority investment in Avendus and Sumitomo Mitsui Banking Corp's acquisition of a stake in Yes Bank. "The entry of MUFG as a key investor reinforces global confidence in India's financial services sector," Umesh Revankar, executive vice chairman of SFL, said in the statement. The purchase-at a company valuation of Rs.1.98 trillion-comes at a premium of about 17% to the current market capitalization of SFL. For the Japanese entity, the investment is a strategic step to establish a foundation in India's micro, small and medium enterprises (MSME) and retail markets and capture the country's growing domestic demand....