Japan's MUFG to invest ₹39,618 crore for 20% stake in Shriram Finance

Japan-based Mitsubishi UFJ Financial Group will invest nearly Rs 39,618 crore to acquire a 20 per cent stake in Shriram Finance through a preferential share issue

Shriram Finance on Friday said Japan-based Mitsubishi UFJ Financial Group (MUFG) will invest Rs 39,617.98 crore to acquire a 20 per cent stake through a preferential issue of shares on a private placement basis at a price of Rs 840.93 per share. The transaction, among the largest investments in an Indian financial services company, is subject to regulatory and shareholder approvals.

 

Following the transaction, MUFG will have the right to nominate two non-independent directors on Shriram Finance’s board.

 

The lender said MUFG will be issued over 471 million shares at Rs 840.93 per share, translating into a 20 per cent stake in the company.

 

 

“The subscription shares to be issued and allotted by the company and to be subscribed by the investor shall represent a minority investment of 20 per cent of the post-issue share capital of the company on a fully diluted basis. Upon completion of the deal, the investor would be classified as a public shareholder of the company,” Shriram Finance said.

 

Additionally, the lender said it has received intimation from members of its promoter and promoter group — Shriram Capital, Shriram Ownership Trust, Shriram Value Services and Sanlam Life Insurance — regarding the execution of a shareholders’ agreement with MUFG and Sanlam Emerging Markets (Mauritius) Limited.

 

As part of the agreement, Shriram Ownership Trust will be subject to non-compete and non-solicitation obligations relating to the lending and credit business of Shriram Finance. In consideration of these obligations, MUFG will pay a one-time, non-recurring non-compete and non-solicitation fee of $200 million (about Rs 1,660 crore) to Shriram Ownership Trust, subject to shareholder approval.

 

The Shriram Group, through Shriram Capital and Shriram Value Services, holds a 24.98 per cent stake in Shriram Finance. South Africa-based Sanlam Life Insurance owns a 0.41 per cent stake, taking the total promoter holding to 25.39 per cent.

 

Shriram Finance is one of India’s largest retail non-banking financial companies, offering credit solutions for commercial vehicles, passenger vehicles, two-wheelers and personal loans. Its assets under management Shriram Finance stood at Rs 2.8 trillion as of September 2025.

 

Japanese financial groups have made sizeable investments in India’s financial services sector this year. Earlier, Sumitomo Mitsui Banking Corporation acquired over a 24 per cent stake in private sector lender Yes Bank for more than $1.6 billion.

 

Separately, Japan’s Mizuho Financial Group said earlier this week that it would acquire a controlling stake of over 60 per cent in Avendus Capital through its subsidiary, Mizuho Securities, subject to regulatory approvals. Reports said the transaction values the deal at around Rs 4,700 crore.

 

India’s financial services sector has also seen investments from global players this year, including NBD Emirates’ $3 billion investment in RBL Bank, International Holding Company’s $1 billion investment in Sammaan Capital, Warburg Pincus and Abu Dhabi Investment Authority’s $877 million investment in IDFC FIRST Bank, and Blackstone’s Rs 6,196 crore investment in Federal Bank.