Shriram Finance-MUFG Mega Deal: Rs 39,620-Crore Deal Marks Biggest Cross-Border Investment In Sector

Shruram Finance-MUFG Deal: In one of the biggest cross-border investment in the financial sector in India, Japan's Mitsubishi UFG Financial Group (MUFG) has planned 20% stake in Shriram Finance for Rs 39,620 crore.

MUFG and Shriram Finance have agreed to enter into a strategic partnership. As per the deal, MUFG will nominate two directors to the board of Shriram, Finance post acquisition, announced the financial lender in a BSE filing on Friday, December 19.

Shriram Finance shares were trading 4.6% higher at Rs 909.15 per share on BSE with a market capitalisation of Rs 1,71,044 crore on BSE at 1:08 pm. The stock had touched fresh 52-week high of Rs 911.35 per share on BSE on Friday.

MUFG-Shriram Finance Deal

The MUFG-Shriram Finance deal worth Rs 39,620 crore has paved way for an eventual acquisition, reported news agency Reuters citing sources.The acquisition has come at a time when the sector has struck deals worth nearly 415 billion so far this year, reported the news agency citing Dealogic data, which is more than double the $6.5 billion achieved in 2024.

"The Board has approved raising of funds of INR 3,96,17,98,28,781.15 (Indian Rupees Thirty Nine Thousand Six Hundred and Seventeen Crores Ninety Eight Lakhs Twenty Eight Thousand Seven Hundred and Eighty One and Paise Fifteen only) from MUFG Bank Ltd. ("Investor") a company incorporated under the laws of Japan," noted the company in its BSE-filing on Friday.

The board of directors of the company had also approved the issue price of the equity share as Rs 840.93 per subscription share including premium of Rs 838.93.

MUFG Bank has signed a memorandum of understanding with Shriram Finance that targets faster growth through cooperation in lending and other services. The two sides plan to work together to expand Shriram Finance's franchise, while MUFG gains deeper exposure to India's retail and small business credit market through this strategic partnership.

The agreement also includes a non-compete and non-solicitation clause on Shriram Ownership Trust, covering Shriram Finance's lending and credit operations. In exchange for this restriction, MUFG will pay Shriram Ownership Trust a one-time, non-recurring non-compete and non-solicit fee of $200 million, separate from the equity investment amount.

For MUFG, the Shriram Finance stake and strategic partnership deliver a sizeable foothold in India's non-bank lending market, pending regulatory clearance. For Shriram Finance, the deal brings long-term capital, a global banking partner and fresh board-level inputs while existing shareholders still await the outcome of the 2026 EGM and subsequent approvals.