New Delhi, Dec. 19 -- Japan's MUFG Bank will acquire a 20% stake in Shriram Finance for Rs 39,618 crore ($4.4 billion), marking the largest foreign investment in India's financial services segment.
Shriram Finance said in an exchange filing that MUFG Bank will acquire the stake via a preferential allotment. Shriram Finance will issue 47.1 crore shares at Rs 840.9 apiece.
The proposed minority investment is subject to shareholder approval, regulatory clearances and customary closing conditions.
The announcement comes amid a spate of similar deals in India's financial services segment.
So far in 2025, Emirates NBD has acquired a 60% stake in RBL Bank for $3 billion, while SMBC picked up a 24% stake in YES Bank for around $1.9 billion.
Similarly, International Holding Company invested around $1 billion in Sammaan Capital, and Warburg Pincus along with ADIA invested $877 million in IDFC First Bank.
Shriram Finance said the fund infusion will significantly enhance its capital adequacy, strengthen the balance sheet, and provide long-term growth capital. The collaboration is further expected to unlock synergies in technology, innovation, and customer engagement, driving sustainable growth. It will also improve access to low-cost liabilities and potentially strengthen credit ratings.
MUFG Bank was advised by KPMG India Corporate Finance, JP Morgan, AZB & Partners, Nishimura & Asahi (Gaikokuho Kyodo Jigyo). Shriram Finance was advised by Wadia Ghandy & Co.
Mitsubishi UFJ Financial Group (MUFG), the parent of MUFG Bank, has a presence in India spanning over 130 years. The investment in Shriram Finance will be MUFG's largest in the country. Its other India investments include Neo Group and Battery Smart.
Founded in 1979, Shriram Finance offers products such as commercial vehicle loans, MSME loans, tractor and farm equipment financing, gold loans, personal loans, and working capital loans. The company operates 3,225 branches across India.
Shriram Finance reported a net profit of Rs 4,463 crore in April-September, up from Rs 4,052 crore a year ago, aided by growth in assets under management. Its loan book rose 15.7% year-on-year to Rs 2.8 trillion as of September 30, 2025.
Published by HT Digital Content Services with permission from VC Circle.