Shriram Finance Shares Gain Over 3% on December 22 After MUFG’s $4.4 Billion Investment Announcement

Shares of Shriram Finance Limited moved higher in early trade on December 22 following the announcement of a significant strategic investment by Japan’s Mitsubishi UFJ Financial Group (MUFG). 

The transaction, disclosed on Friday, marks the largest deal in India’s financial services sector to date and positions MUFG as a key long-term shareholder, subject to regulatory approvals.

Shriram Finance Share Price Performance

Shriram Finance shares gained more than 3% during morning trade on December 22. As of 09:54 AM, the stock was trading at ₹932.55, up ₹30.85 or 3.42% from the previous close of ₹901.70.

The stock opened at ₹919, touched an intraday high of ₹929 and a low of ₹915 during the session, reflecting strong investor interest following the announcement.

Details of the MUFG Investment

MUFG Bank, Japan’s largest lender with assets of approximately $2.8 trillion, announced that it will subscribe to a preferential equity allotment in Shriram Finance. The investment will result in MUFG acquiring a 20% equity stake in the company.

The total financial commitment for the transaction stands at ₹39,620 crore, equivalent to approximately $4.4 billion. 

MUFG stated that the agreement has been entered into with Shriram Finance and its major shareholders, including Shriram Ownership Trust and Shriram Capital.

Strategic Implications of the Transaction

Upon completion of the transaction, subject to regulatory and statutory approvals, Shriram Finance will become an equity affiliate of both MUFG and MUFG Bank. 

The Japanese lender described the investment as a strategic partnership aimed at strengthening its presence in India’s financial services sector.

The deal has also taken the cumulative value of transactions in India’s financial services space this year to over $11 billion, underscoring heightened global interest in the sector.

Management Interaction with Media

Shriram Finance’s management is scheduled to address the media later in the day at noon on Monday, December 22. 

The interaction is expected to provide further clarity on the strategic rationale, future collaboration plans, and growth outlook following the investment.

Read More: SEBI Widens Strategic Investor Definition for REITs and InvITs.

Conclusion

The sharp move in Shriram Finance shares reflects positive market sentiment around the scale and strategic nature of MUFG’s investment. While the transaction remains subject to regulatory approvals, it represents a significant development for the company and highlights growing foreign participation in India’s financial services industry.

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