New Delhi, Dec 22 (.) In one of the most significant foreign investments in India’s financial services industry, MUFG Bank Ltd. has announced plans to invest Rs 39,618 crore (approximately USD 4.4 billion) in Shriram Finance Limited through a preferential issuance of equity shares.
The proposed transaction, approved by the Board of Directors of Shriram Finance at its meeting held on Monday will result in MUFG Bank acquiring a 20 per cent stake in the company on a fully diluted basis.
The landmark investment positions Shriram Finance at the centre of global investor confidence in India’s lending and financial services ecosystem. It is being described as the largest foreign direct investment in an Indian financial services company to date and reflects strong conviction in the sector’s long-term growth potential.
The transaction is subject to shareholder approval, regulatory clearances and other customary closing conditions.
Shriram Finance, India’s second-largest retail non-banking financial company in terms of assets under management, is expected to significantly strengthen its capital base through this fund infusion.
The investment will enhance capital adequacy, reinforce the balancesheet and provide long-term growth capital, enabling the company to accelerate expansion across its lending and financial inclusion initiatives.
The collaboration brings together Shriram Finance’s deep-rooted domestic franchise and extensive distribution network with MUFG Bank’s global financial strength and international expertise.
The partnership is expected to unlock synergies across technology, innovation and customer engagement while improving access to low-cost funding. It may also contribute to stronger credit ratings and alignment of governance and operational practices with global best standards.
Commenting on the development, Umesh Revankar, Executive Vice Chairman, Shriram Finance Limited, 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.”
Revankar said the move is aimed at strengthening capabilities, driving economic progress, and create meaningful impact across communities, building a future-ready institution anchored in trust and good governance.
From MUFG’s perspective, the investment represents a deepening of its long-standing engagement with India. Mitsubishi UFJ Financial Group, the parent of MUFG Bank, has a presence in India spanning more than 130 years, with cumulative investments of USD 1.7 billion and employment generation for around 5,000 people.
The proposed investment in Shriram Finance will be MUFG’s largest investment in India to date, reinforcing its commitment to financial inclusion and sustainable economic growth.
Hironori Kamezawa, Group Chief Executive Officer, Mitsubishi UFJ Financial Group, stated, “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.”
Industry observers view the transaction as a strong endorsement of India’s NBFC sector and its resilience, particularly in serving underserved segments such as small road transport operators, MSMEs and individual entrepreneurs.
With assets under management exceeding Rs 2.81 trillion, Shriram Finance operates through more than 3,200 branches and serves nearly 97 lakh customers across the country.
The investment is also expected to enhance India’s integration into global financial markets while setting a new benchmark for foreign participation in the country’s financial services space.
As India’s credit demand expands alongside economic growth, the MUFG-Shriram Finance partnership is poised to play a pivotal role in supporting inclusive development and strengthening the country’s lending ecosystem.
. SAS PRS