Key Points:
- MUFG plans to invest about $3.2B for a significant minority stake in Shriram Finance.
- Shares gained ~2% as investors anticipate a strategic foreign partnership.
- The deal would be one of the largest foreign investments in India’s nonbank financial sector.
Shriram Finance shares rise about 2 percent on Monday after a report said Japan’s Mitsubishi UFJ Financial Group is in final talks to invest about $3.2 billion for a 20 percent stake, potentially sealing a deal this week.
MUFG Nears Minority Investment, Report Says
Shriram Finance shares rise further following a report that said Tokyo-based Mitsubishi UFJ Financial Group, known as MUFG, is nearing an agreement to acquire a significant minority stake in the Indian lender. The report cited people familiar with the matter.
According to Bloomberg, MUFG plans to invest about 500 billion yen, or roughly $3.2 billion, to buy close to 20 percent of Shriram Finance. The talks are said to be at an advanced stage, with an agreement likely as soon as this week.
According to other sources, it could not independently verify the information. Shriram Finance did not immediately respond to requests for comment, while MUFG declined to comment on market speculation, according to people familiar with the matter.
If completed, the transaction would rank among the largest foreign investments in India’s nonbank financial sector and deepen MUFG’s presence in the country’s fast-growing consumer finance market.
Shares Rise as Investors React to Report
Shriram Finance shares were trading at 863.50 rupees, up about 2 percent, at 2:45 p.m. local time. Earlier in the session, Shriram Finance shares rise nearly 2.7 percent to a day’s high of 870.60 rupees.
Market participants said expectations of a strategic foreign investment supported the stock, even as broader markets traded mixed.
“The market is reacting to the possibility of a long-term strategic partner coming in at a meaningful valuation,” said an equity analyst at a Mumbai-based brokerage, who spoke on condition of anonymity because the firm is not authorized to comment publicly. “Such a deal could strengthen the company’s balance sheet and governance profile.”
Shriram Finance shares have gained more than 4 percent over the past five trading sessions and over 5 percent in the past month. The stock has risen more than 27 percent in the past six months and is up over 47 percent so far in 2025.
Ownership Structure and Valuation in Focus
As of Sept. 30, promoters and promoter groups held 25.39 percent of Shriram Finance, while the remaining 74.61 percent was owned by public shareholders, according to company filings.
Shriram Capital was the largest promoter, with a 17.85 percent stake, followed by Shriram Value Services, which held 7.11 percent.
Analysts said any stake sale to MUFG would likely come from public shareholders or through a combination of primary and secondary transactions, though details remain unclear.
“At around seventeen times earnings, the stock is not stretched compared with peers,” said the analyst. “A global partner could add credibility and access to cheaper funding, which the market tends to reward.”
Shriram Finance operates across commercial vehicle loans, consumer finance, and gold-backed lending, sectors that continue to see strong demand in India despite tighter global financial conditions.
Investors are awaiting official confirmation of the talks and clarity on deal structure, pricing, and regulatory approvals. Until then, analysts cautioned that Shriram Finance shares rise could remain sensitive to news flow around the reported negotiations.
Visit Business Viewpoint Magazine to read more.
