Shriram Finance breaks into top 50 most-valuable club; up 94% from 2025 low

In the past three trading days, the stock price of Shriram Finance has rallied 10% after Japanese lender MUFG Bank said it will invest ₹39,618 cr through preferential allotment of equity shares.

Shriram Finance share price today

 

Share price of Shriram Finance hit a new high of ₹956.70, gaining 2 per cent on the BSE in Tuesday’s intra-day trade. 

 

In the past three trading days, the stock price of the non-banking finance company (NBFC) has rallied 10 per cent after Japanese lender MUFG Bank said it will invest ₹39,620 crore in Shriram Finance through preferential allotment of equity shares, at ₹840.93 per share.

 

Meanwhile, in the past three months, the market price of Shriram Finance has appreciated by 52 per cent, as compared to 4.4 per cent rise in the BSE Sensex. The stock has zoomed as much as 94 per cent from its 52-week low of ₹493.60 touched on January 20, 2025.

 

Shriram Finance enters top 50 most-valuable stock’s club

 

A sharp rally in the stock price of the company has seen Shriram Finance enter the top 50 most-valuable listed companies on the BSE. At 02:30 PM; with ₹1.8 trillion market capitalisation, Shriram Finance stood at the 50th position in the overall market capitalisation ranking, BSE data shows.

 

Shriram Finance surpassed two-wheeler firm TVS Motor (₹1.75 trillion) in market capitalisation ranking today.

 

Among NBFCs, Bajaj Finance tops the list with market capitalisation of ₹6.29 trillion, followed by Bajaj Finserv (₹3.27 trillion) and Jio Financial Services (₹1.9 trillion).

 

MUFG Bank to invest ₹39,618 crore in Shriram Finance 

 

Shriram Finance’s board has approved a preferential issue of ₹39,618 crore to MUFG Bank through issuance of 471 million equity shares at ₹840.93 per share, resulting in 20 per cent fully diluted stake for MUFG, subject to shareholder and regulatory approvals (RBI, CCI, etc.)

 

The deal will strengthen Shriram Finance’s capital base, improve its balance sheet resilience and provide long-term growth capital. This is being the largest foreign direct investment (FDI) deal in the banking, financial services and insurance (BFSI) sector. Post transaction, MUFG will hold 20 per cent, promoter & promoter group 20.3 per cent, and the public 60 per cent. 

 

Management highlighted strong business visibility, particularly in vehicle finance, and has revised growth guidance to 20 per cent CAGR over the next 4–5 years (vs earlier 15 per cent), supported by rising retail credit demand. The capital adequacy ratio is expected to improve to 31 per cent from 20.7 per cent, and management expects the strengthened capital profile to support a potential rating upgrade over time, which could lower cost of funds by 50–75 bps relative to AAA-rated peers, ICICI Securities said.

 

The brokerage firm expects steady growth of 15–16 per cent, driven by continued focus on the SME segment. Margin tailwinds from easing cost of funds—supported by a potential credit rating upgrade—and stable asset quality are likely to provide incremental support to valuations following this transaction. Expect RoA to improve to 3.5 per cent in FY28E. Factoring in book accretion and rolling to FY28E, analysts maintain valuation multiple at ~2.2x FY28E BV, implying a target price of ₹1,200. ICICI Securities has maintained its 'BUY' rating on the stock.

 

The entry of MUFG as a strategic partner represents a transformative milestone for Shriram Finance, materially strengthening its capital base and enhancing its credit credibility. This strategic partnership not only de-risks the company’s growth trajectory but also expands its ability to serve a broader customer base across the CV, MSME, and retail segments, while reinforcing long-term franchise positioning, believe analysts at Motilal Oswal Financial Services.

 

Despite strong stock performance, the brokerage firm sees a further upside as the company enters a phase of stronger execution and profitability. Valuations have re-rated from ~1.5x to ~2.6x FY26E P/BV, with room for additional expansion if growth and asset quality trends hold. The brokerage firm reiterated its BUY with a target price of ₹1,100 (2x Mar’28E BVPS).