Shriram Finance shares rise 2% on ratings upgrade; up 13% in a month

Shriram Finance shares rose 2.2 per cent on BSE, registering an intra-day high of ₹976.35 per share. The buying on the counter came after Care Ratings upgraded its stance on the company’s non-convertible debentures and subordinated debt.

 

At 9:50 AM, Shriram Finance’s share price was trading 0.99 per cent higher at ₹964.85 per share on BSE. In comparison, the BSE Sensex was down 0.11 per cent at 84,600.35.

 

The company has a total market capitalisation of ₹1,81,523.22 crore. Its 52-week high was at ₹983.35, and its 52-week low was at ₹493.6. 

 

Since January 2025, Shriram Finance has advanced 65 per cent as compared to Sensex’s rise of 8 per cent. In a month, the stock has rallied 13 per cent against the Sensex’s fall of 1.2 per cent.

 

 

The credit rating agency has upgraded the company’s non-convertible debentures (₹2,368.88 crore) and subordinated debt (₹156.1 crore) to “CARE AAA”, from “CARE AA+”, keeping the outlook unchanged as “Stable”.  Further, it has reaffirmed the “CARE A1+” rating for the company’s commercial paper worth ₹7,500 crore. According to the filing, the review comes after the recent developments in the company, including the company’s operational and financial performance for FY25 (audited) and H1 FY26 (unaudited), and the likely impact of these factors on its overall credit profile.

 

Earlier this month, Japan-based MUFG Bank, a consolidated subsidiary of Mitsubishi UFJ Financial Group (MUFG), said it will invest ₹39,618 crore, or about $4.4 billion, to acquire a 20 per cent stake on a fully diluted basis through a preferential issue of equity shares.  CATCH STOCK MARKET LIVE UPDATES TODAY

 

Shriram Finance’s board has approved a preferential issue of ₹39,618 crore to MUFG Bank through the issuance of 471 million equity shares at ₹840.93 per share, resulting in a 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 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 the cost of funds by 50–75 basis points (bps) relative to AAA-rated peers, ICICI Securities said.