MUFG Bank to Acquire 20% Stake in Shriram Finance For ₹396.2 Billion

Japan’s MUFG Bank has entered into definitive agreements to invest ₹396.18 billion (around $4.4 billion) in Shriram Finance Limited to acquire 20% stake, marking the largest foreign direct investment in an Indian financial services company.

The Board of Directors of Shriram Finance approved the transaction, which involves a preferential issuance of equity shares to the Japanese lender. The investment will result in MUFG Bank acquiring a 20.0% stake in Shriram Finance on a fully diluted basis, post-conversion of all authorised employee stock ownership plans.

The transaction is priced at ₹840.93 per share, representing a marginal discount to the prior closing price. This capital infusion aims to reinforce the company’s capital base, accelerate its growth trajectory, and provide long-term growth capital. Under the terms of the strategic partnership, MUFG Bank will nominate two directors to the Shriram Finance board, subject to shareholder and regulatory approvals. The collaboration combines Shriram Finance’s domestic franchise and distribution network with MUFG Bank’s global expertise to unlock synergies in technology, innovation, and customer engagement. Furthermore, the infusion will improve access to low-cost liabilities and potentially strengthen Shriram Finance’s credit ratings by aligning governance with global standards.

In October 2025, Emirates NBD agreed to invest ₹268.53 billion for a stake of up to 60% in RBL Bank. During the same month, an affiliate of Blackstone committed ₹61.96 billion for a 9.99% stake in Federal Bank. Earlier in 2025, a unit of Warburg Pincus and the Abu Dhabi Investment Authority invested ₹101.24 billion for a 10% dilution in IDFC First Bank.

Umesh Revankar, Executive Vice Chairman of Shriram Finance Limited, stated in the press release: “Together, we aim to strengthen our capabilities, drive economic progress, and create meaningful impact across communities, building a future-ready institution anchored in trust and good governance.”

Shriram Finance Limited, the flagship company of the Shriram Group, holds Assets Under Management exceeding ₹2.81 trillion. Its portfolio includes commercial vehicle loans, Micro, Small and Medium Enterprises loans, tractors and farm equipment, gold loans, personal loans, and working capital loans. Shriram Finance operates 3,225 branches, employs 78,833 staff, and serves 9.66 million customers.