Mitsubishi to Buy 20 percent Stake in Shriram Finance for $4.4 Billion

By siliconindia  |  Saturday, December 20, 2025

Mitsubishi to Buy 20 percent Stake in Shriram Finance for $4.4 Billion
  • MUFG to acquire a 20 percent stake in Shriram Finance for $4.4 billion through a preferential equity allotment
  • Marks the largest foreign direct investment in India’s financial services sector to date
  • Strengthens capital base, governance standards, and long-term growth prospects

Japan’s Mitsubishi UFJ Financial Group (MUFG) has announced a $4.4 billion (Rs 39,618 crore) investment in Shriram Finance, marking the largest foreign direct investment in India’s financial services space to date.

Under the deal, MUFG will acquire a 20 percent minority stake in the non-bank finance company through a preferential allotment of equity shares. Shriram Finance will issue 47.1 crore shares at Rs 840.9 each to MUFG Bank, according to a stock exchange filing.

As part of the agreement, MUFG will have the right to nominate two directors to Shriram Finance’s board. The Japanese lender will also enjoy pre-emptive rights to maintain its proportional shareholding in future fundraises. These rights will remain valid as long as MUFG’s ownership stays above 10 percent on a fully diluted basis.

The partnership brings together Shriram Finance’s strong domestic presence and wide distribution network with MUFG’s global banking expertise and financial strength. Shriram Finance said the capital infusion will significantly boost its capital adequacy and balance sheet, while providing stable, long-term growth capital.

The company expects the investment to improve access to low-cost funding, support business expansion, and potentially lead to stronger credit ratings. It also plans to align its governance and operational practices more closely with global standards.

Also Read: RBI's Groundbreaking Regulatory Moves of 2025

Industry observers see the deal as a major vote of confidence in India’s financial services sector and its long-term growth outlook. The transaction had been reported earlier as a proposed deal and is now officially confirmed.

With this investment, MUFG deepens its presence in India, while Shriram Finance gains a global strategic partner to support its next phase of growth.

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