MC EXCLUSIVE MUFG in advanced talks with Shriram Finance for a 20% stake

The deal, if it consummates in the proposed manner, assumes a lot of significance as it signals a large investor interest in the group after the exit of Piramal in 2023

In what could be 2025’s largest deal in the non-banking financial services space, Japanese major Mitsubishi UFJ Financial Group is in advanced talks to pick up 20 percent stake in Shriram Finance Limited. “A deal announcement is likely soon,” said a source aware of the possible transaction.

MUFG may pick up about 20 percent stake in the vehicle lender for $3.5 – 4 billion or approximately Rs 33,000 – 35,000 crore, by way of fresh capital infusion.

The deal is likely to result in at least two nominee directors from MUFG securing board seats in Shriram Finance. Internally, the company is set for a change in leadership with Parag Sharma elevated as MD and CFO to succeed the lender’s long-time top boss, YS Chakravarthi, who is set to superannuate next month. Sources also say that another Shriram group veteran Subhashri Shriram, presently the MD & CEO of Shriram Capital, promoter entity of Shriram Finance holding 17.83 percent stake in the vehicle financier, is likely to join the board of Shriram Finance.

After acquiring 20 percent in Shriram Finance, MUFG will have the first right to participate in any subsequent capital raises of the non-bank, thereby having the option to eventually own up to 51 percent of the company shareholding, according to sources aware of the deal. The deal is likely to be priced at Rs 760 – 780 a share. In the last one month, shares of Shriram Finance have gained 21 percent as against a 3.4 percent return by the BSE Sensex.

The deal, if it consummates in the proposed manner, assumes a lot of significance as it signals a large investor interest in the group after the exit of Piramal in 2023.

“There was nothing on the table at Shriram Finance board meeting last Friday (Oct 31, 2025) vis-a-vis the query you have raised,” replied an official spokesperson of Shriram Finance with respect to the deal talks with MUFG.

In a post-results conversation with CNBC-TV18, Umesh Revankar, executive vice-chairman, Shriram Finance said that banks and NBFCs do look at raising resources all the time. “It is (our) raw material, and therefore there will be multiple discussions. Unless it is a very confirmed or concrete structure or plan, then only it will come to the board”. This was in response to a question on talks of a capital raise ongoing.

Economic Times was first to report about a possible deal talk between Shriram Finance and MUFG on October 1.