This will yet be the largest FDI (foreign direct investment) deal in the non-banking finance sector.
The board of Shriram Finance Ltd. (SFL), on Friday, cleared the decks for an agreement with MUFG Bank Ltd. for the latter to invest Rs. 39,618 crore in Shriram Finance through preferential issuance of equity shares.This investment will result in MUFG Bank acquiring a 20.0 % stake on a fully diluted basis in Shriram Finance, according to a release.
Shriram Finance is the country’s second largest retail non-banking financial company.
NBFC
nonThe proposed minority investment by MUFG Bank is subject to shareholder approval and other regulatory clearances.
“The fund infusion will significantly enhance SFL’s capital adequacy, strengthen its balance sheet and provide long-term growth capital,” the company said.
“This transaction marks a defining moment in our growth journey. MUFG is one of the largest financial institutions, with an extensive international network and strong values rooted in substantial growth and financial inclusion. The entry of MUFG as a key investor reinforces global confidence in India’s financial services sector and our role as a leader within it. Together, we aim to strengthen our capabilities, drive economic progress, and create meaningful impact across communities, building a future-ready institution anchored in trust and good governance,” Umesh Revankar, Executive Vice-Chairman, Shriram Finance Ltd., said in a release.
“MUFG and Shriram Finance share a common vision and aligned values for the future. Leveraging our global capabilities, MUFG is committed to supporting Shriram Finance’s growth and contributing to economic development, communities, and society in India,” the release quoted Hironori Kamezawa, Group Chief Executive Officer, Mitsubishi UFJ Financial Group, as saying.
