Did MUFG Just Acquire a 20% Stake in Shriram Finance for Rs 39,600 Crore?
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Synopsis
In a groundbreaking move, Mitsubishi UFJ Financial Group has acquired a 20% stake in Shriram Finance for a whopping Rs 39,600 crore, marking the largest foreign investment in India's financial sector. This deal not only signifies global confidence but also positions Shriram Finance for expansive growth.
Key Takeaways
- MUFG's acquisition is a landmark investment in India’s financial services sector.
- This deal will enhance global confidence in India's lending ecosystem.
- Shriram Finance plans to use the funds for business expansion and growth.
- The transaction is subject to shareholder approval and regulatory clearances.
- It marks a significant milestone in foreign direct investment in India.
Mumbai, Dec 19 (NationPress) - The prominent Japanese banking institution, Mitsubishi UFJ Financial Group, revealed on Friday its acquisition of a 20% stake in Shriram Finance via a preferential allotment of shares, amounting to $4.4 billion, or approximately Rs 39,600 crore. This investment is poised to be the largest foreign direct investment in India’s financial services sector to date.
As part of the agreement, MUFG will have the authority to appoint two nominee directors to the Shriram Finance board.
This significant investment underscores the increasing global confidence in India's lending and financial ecosystem.
At nearly Rs 39,618 crore, this transaction marks the most substantial investment in India’s financial sector thus far.
According to Shriram Finance's filing, “The Board has approved the raising of funds amounting to Rs 3,96,17,98,28,781.15 from MUFG Bank Limited, a company registered under Japanese law, by issuing 47,11,21,055 fully paid-up equity shares with a face value of Rs 2 each at a subscription price of Rs 840.93 per share through a preferential issue on a private placement basis.”
This deal eclipses previous major investments, including Emirates NBD's investment in RBL Bank, Sumitomo Mitsui Banking Corporation's stake acquisition in Yes Bank, and others.
Shriram Finance stated that the newly raised capital will bolster long-term growth and facilitate business expansion across its lending segments.
The transaction entails the primary issuance of equity shares and is contingent upon shareholder approval, regulatory clearances, and standard closing conditions.
The lender currently manages assets exceeding Rs 2.81 trillion and operates through a comprehensive network of 3,225 branches across India.
“The floor price of the equity shares, as determined per Chapter V of SEBI ICDR Regulations, is Rs 840.93 per subscription share,” the company confirmed.
Following the announcement, shares of Shriram Finance surged by 4.15% to Rs 905.5 by around 2:24 PM on Friday.
Point of View
It's crucial to recognize the implications of such a significant investment in our financial landscape. MUFG's stake in Shriram Finance not only reflects international confidence but also showcases the potential for growth in India's lending environment. We stand with the nation in observing how this partnership evolves, emphasizing the importance of robust foreign investment in driving our economy forward.
NationPress
20/12/2025
Frequently Asked Questions
What is the value of the stake acquired by MUFG in Shriram Finance?
MUFG acquired a 20% stake in Shriram Finance valued at $4.4 billion, which is approximately Rs 39,600 crore.
What does the investment mean for Shriram Finance?
The investment will support long-term growth and business expansion across Shriram Finance's lending segments.
How many branches does Shriram Finance operate?
Shriram Finance operates through a network of 3,225 branches across India.
What rights does MUFG have under this deal?
Under the deal, MUFG will have the right to appoint two nominee directors to the board of Shriram Finance.
What was the market reaction to the announcement?
Following the announcement, shares of Shriram Finance rose by 4.15% to Rs 905.5.
