Japanese financial major Mitsubishi UFJ Financial Group (MUFG) is set to pick up a 20 percent stake in Shriram Finance Limited through a fresh capital infusion, in what could emerge as one of the largest non-banking financial services (NBFC) deals of 2025, sources aware of the development said.
The proposed transaction will not trigger an open offer, as the stake acquisition will be entirely through a primary issuance of shares.
The capital infusion is expected to be in the range of $3.5-4 billion, valuing Shriram Finance close to its current market capitalisation of about $10 billion, in dollar terms.
According to sources, the Shriram Finance board is likely to meet on Friday, December 19 to consider the proposal.
Queries emailed to Shriram Finance remained unanswered at the time of publication.
Moneycontrol was the first to report earlier that MUFG has been in advanced discussions with Shriram Finance to acquire the stake, with a formal announcement likely in the near term.
The transaction assumes added significance as it signals renewed large-investor interest in the Shriram group following the exit of Piramal in 2023. It would also surpass the investment made by Emirates NBD in RBL Bank and SMBC's acquisition of Yes Bank, making it the largest deal of 2025 in the financial services sector.
As part of the transaction, MUFG is likely to secure at least two board seats through nominee directors. The deal is coming at a time when there is a management transition at Shriram Finance.
Parag Sharma was recently elevated as managing director and chief financial officer, to succeed it's long-time chief executive Y S Chakravarthi.
In addition, Subhashri Shriram, MD & CEO of promoter entity Shriram Capital, is likely to join the board of Shriram Finance.
Sources added that MUFG will have the first right of refusal to participate in future capital raises, giving it the option to eventually increase its stake to as much as 51 percent over time.
The proposed deal is likely to be priced at around the current market price of Rs 850 a share. It's important to note that Shriram Finance's stock price has appreciated by 38 percent in the last three months, outperforming the BSE Sensex which has returned about three percent gains during this period.
So far in 2025, the Shriram Finance stock has gained about 46 percent in trade, positioning it among the best performers of the current year.
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