On 19 December, Shriram Finance Ltd., the flagship company of the Shriram Group, entered into an agreement with MUFG Bank for the latter to invest Rs 39,618 crore for a 20 per cent stake, making it the largest foreign direct investment in a financial services company in India.
MUFG Bank is wholly owned and controlled by Mitsubishi UFJ Financial Group, Inc., which is a financial services and holding company incorporated in Tokyo, Japan.
Last month, the Competition Commission of India approved the acquisition of 20 per cent stake in Shiram Finance Ltd by Japan’s MUFG Bank Ltd.
MUFG Bank has subscribed to 471,121,055 equity shares at an issue price of Rs
840.93 per share, with the total investment amounting to approximately Rs 39,618 crore.
The transaction represents the largest cross-border investment
in India’s financial services sector. It further strengthens MUFG’s presence in India and
enables Shriram Finance to leverage MUFG’s global expertise and capabilities to accelerate its long-term growth strategy, according to a statement.
“This marks the successful culmination of a landmark transaction and the beginning of
a long-term strategic collaboration with MUFG. We believe this collaboration will open
new avenues for innovation, enhance access to diversified and cost-effective funding,
and support the adoption of global best practices in risk management and governance.
The investment significantly strengthens our capital base and positions us to
accelerate growth across key business segments. As we move forward, our focus
remains on delivering consistent and responsible growth while creating long-term value
for all stakeholders,” Umesh Revankar, Executive Vice-Chairman, Shriram Finance, said.
“We are very pleased to commence our strategic collaboration with SFL. SFL is a
leading financial institution in India with a strong business foundation and significant
growth potential in the MSME and retail segments. This investment represents an
important step that underscores MUFG’s long-term commitment to the Indian market,
and we believe it will contribute to India’s sustainable economic growth and the
advancement of financial inclusion. Going forward, we will support SFL’s sustainable
growth by leveraging MUFG’s customer network and experience cultivated through
partner bank management,” Junichi Hanzawa, President and Group CEO, MUFG, said.
