Shriram Finance shares rise 4% to hit record high after Rs 39,600-crore MUFG deal

Shriram Finance shares rise 4% on re-rating hopes after mega MUFG deal

Shares of Shriram Finance rose over 4% on December 19 after Japan's MUFG said it will acquire a 20% stake in the NBFC for Rs 39,600 crore ($4.4 billion) through preferential allotment of equity shares.

This marks the largest FDI in India's financial sector.

The floor price for the preferential issue has been set at Rs 840.83 per share, with MUFG set to acquire 47.11 crore equity shares.

At 1:30 pm on December 19, Shriram Finance shares were trading 4.5% higher at Rs 909 apiece, thus emerging as the biggest gainer on Nifty 50 index.

Shares of Shriram Finance rose over 45% since news of MUFG deal talks were reported in early October. So far in 2025, the NBFC's shares rose 54% as against Nifty 50's 10% climb.

The transaction assumes added significance as it marks renewed large-investor interest in the Shriram Group following the exit of Piramal in 2023.

It also surpasses Emirates NBD’s investment in RBL Bank and SMBC’s acquisition of Yes Bank, making it the largest financial services deal of 2025 so far.

Shriram, India’s second-biggest non-bank lender after Bajaj Finance Ltd., operates businesses across urban and rural areas, focusing on loans for commercial vehicles, tractors and passenger cars.

The deal is coming at a time of management transition at Shriram Finance. Parag Sharma was recently elevated as Managing Director and Chief Financial Officer, succeeding long-time chief executive Y S Chakravarthi.

The proposed minority investment by MUFG Bank is subject to shareholder approval, regulatory clearances and other customary closing conditions. The transaction involves a primary issuance of equity shares and will significantly strengthen Shriram Finance’s capital base, improve its balance sheet resilience and provide long-term growth capital to support business expansion across lending segments, the release added.

Commenting on the transaction, Umesh Revankar, Executive Vice Chairman of Shriram Finance, said the investment marks a defining milestone in the company’s growth journey and reflects global confidence in both India’s financial services sector and Shriram Finance’s leadership position. He added that the partnership with MUFG would help strengthen capabilities, improve governance standards and build a future-ready institution anchored in trust and financial inclusion

Hironori Kamezawa, Group Chief Executive Officer of Mitsubishi UFJ Financial Group, said MUFG was proud to enter into the transaction and become a strategic partner of one of India’s most respected financial institutions. He said MUFG and Shriram Finance share a common vision for sustainable growth and that MUFG would leverage its global capabilities to support Shriram Finance’s expansion and contribute to economic development and communities in India.