On December 19, Japan’s Mitsubishi UFJ Financial Group (MUFG) announced it has acquired a 20% stake in Shriram Finance through a preferential allotment of shares, in a transaction valued at $4.4 billion (Rs 39,600 crore), marking the largest foreign direct investment in India’s financial sector. MUFG will have the right to appoint two nominee directors to Shriram Finance’s board. The floor price for the preferential issue has been set at Rs 840.83 per share, with MUFG acquiring 47.11 crore equity shares.
This $4.4 billion deal surpasses previous large investments in India’s financial services sector, including Emirates NBD’s Rs 26,850-crore investment in RBL Bank and Sumitomo Mitsui Banking Corporation’s Rs 14,043-crore stake in Yes Bank. Shriram Finance, with assets under management exceeding Rs 2.81 trillion, operates a nationwide network of 3,225 branches.
The minority investment is subject to shareholder approval, regulatory clearances, and customary closing conditions. The capital infusion will strengthen Shriram Finance’s balance sheet, enhance governance, and support growth across lending segments. Umesh Revankar highlighted that the deal underscores global confidence in India’s financial ecosystem, while MUFG CEO Hironori Kamezawa emphasized leveraging global expertise to drive sustainable expansion. Shriram Finance shares rose 1.8% to Rs 886 by 12:20 PM.