MUFG Invests ₹39,618 Crore in Shriram Finance, Buys 20% Stake; Share Price Jump 5%

Shriram Finance has approved a major fund raise of ₹39,617.98 crore from Japan’s MUFG Bank through a preferential issue of equity shares. After this investment, MUFG will hold a 20% stake in the company on a fully diluted basis.

Biggest Financial Sector FDI

This deal is expected to be the largest foreign direct investment (FDI) in India’s financial services sector so far, highlighting strong global confidence in Shriram Finance and the Indian lending market.

Details of the Share Issue

The fund raise will be done by issuing 47.11 crore fully paid-up equity shares at a price of ₹840.93 per share. This price includes a premium of ₹838.93 per share. The decision was taken at the company’s board meeting held today.

MUFG to Remain a Public Shareholder

After the transaction, MUFG will be classified as a public shareholder. Shriram Finance clarified that this investment will not lead to any change in management control of the company.

Approvals Still Required

The deal is subject to approval from shareholders and regulators, including the Reserve Bank of India (RBI) and the Competition Commission of India (CCI). The board has also approved a one-time non-compete and non-solicit fee of $200 million to Shriram Ownership Trust, subject to public shareholder approval.

Shriram Finance Share Price Reaction

Following the announcement, Shriram Finance share price (NSE: SHRIRAMFIN) surged nearly 5% during Friday’s trade. On a year-to-date basis, the stock has gained around 52.9%, reflecting strong investor optimism.

Conclusion

MUFG’s ₹39,618 crore investment is a landmark deal for Shriram Finance and India’s financial sector. It strengthens the company’s capital base, boosts investor confidence, and underlines India’s growing appeal to global financial giants.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.