MUFG Bank Announces ₹39,618 Crore Investment in Shriram Finance

Shriram Finance Limited has entered into definitive agreements with MUFG Bank Ltd. for an investment of INR 39,618 crore (approximately USD 4.4 billion) through a preferential issuance of equity shares. The transaction, approved by Shriram Finance's Board of Directors today, will result in MUFG Bank acquiring a 20% stake on a fully diluted basis.

The investment represents the largest foreign direct investment in a financial services company in India and marks a significant milestone for the country's lending sector. Shriram Finance, India's second-largest retail Non-Banking Financial Company by assets under management, manages assets exceeding INR 2.81 trillion across 3,225 branches nationwide.

The transaction is subject to shareholder approval, regulatory clearances, and customary closing conditions. Upon completion, the partnership will combine Shriram Finance's domestic franchise and distribution network with MUFG Bank's global expertise and financial strength.

The capital infusion is expected to enhance Shriram Finance's capital adequacy, strengthen its balance sheet, and provide long-term growth capital. The collaboration aims to unlock synergies in technology, innovation, and customer engagement while improving access to low-cost liabilities and potentially strengthening credit ratings.

Umesh Revankar, Executive Vice Chairman of Shriram Finance, described the transaction as "a defining moment" in the company's growth journey, noting that MUFG's entry reinforces global confidence in India's financial services sector.

Hironori Kamezawa, Group Chief Executive Officer of Mitsubishi UFJ Financial Group, stated that MUFG is proud to become a strategic partner of Shriram Finance, emphasizing the shared vision and aligned values between the two institutions.

MUFG's parent entity, Mitsubishi UFJ Financial Group, has maintained a presence in India for over 130 years, contributing USD 1.7 billion in investments and creating approximately 5,000 jobs. This investment in Shriram Finance will be MUFG's largest investment in India.

Shriram Finance, established in 1979, serves small road transport operators and small business owners, leading in organized financing of pre-owned commercial vehicles and two-wheelers. The company offers commercial vehicle loans, MSME loans, tractor and farm equipment financing, gold loans, personal loans, and working capital loans to 96.6 lakh customers through its 78,833 employees.

MUFG Bank is Japan's premier bank with a global network spanning around 50 countries. Its parent, Mitsubishi UFJ Financial Group, is one of the world's leading financial groups with approximately 2,000 locations globally and about 150,000 employees.