Mumbai/IBNS, Dec. 19 -- Shares of Shriram Finance rose nearly 4% on Friday after Japan's Mitsubishi UFJ Financial Group (MUFG) agreed to invest Rs.40,000 crore in the company, media reports said.

The transaction is being seen as the largest foreign direct investment (FDI) in India's financial sector to date, highlighting growing global investor confidence in the country's financial services space.

The investment comes after MUFG's earlier attempt to acquire a $2 billion stake in HDB Financial Services, the NBFC arm of HDFC Bank, failed to materialise.

The Shriram Finance deal also underscores the surge in Japanese investments in India in recent years, particularly in the banking and financial services sector.

Shriram Finance Ltd is on...