Earnings upgrade ahead for Shriram Finance as MUFG deal boosts capital base

MUFG Bank's Rs 39,620 crore preferential investment could lift Shriram Finance's capital ratios, support faster AUM growth and a rating upgrade, though RoE may dilute near term

Japanese lender MUFG Bank will invest ₹39,620 crore in Shriram Finance Ltd (SFL) through preferential allotment of equity shares, at ₹841 per share at a post-money valuation of 1.8 times price-to-book value. The deal will strengthen Shriram Finance’s capital base, improve its balance sheet resilience and provide long-term growth capital. This is about 66 per cent of September 2025 net worth and the largest foreign direct investment (FDI) deal in the banking, financial services and insurance (BFSI) sector. On conclusion of the deal, the promoter stake will fall to 20.3 per cent vs 25.4 per cent in September 2025, despite