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The Board of Directors of Shriram Finance Limited (“SFL”) at their meeting held today approved entering into definitive agreements with MUFG Bank Ltd. (“MUFG Bank”) for an investment of INR 39,618 crore (~ USD 4.4 billion) in SFL through a preferential issuance of equity shares. This investment will result in MUFG Bank acquiring a 20.0 % stake on a fully diluted basis.[1]

This landmark transaction underscores SFL’s status as India’s second largest retail Non-Banking Financial Company (NBFC) [2] in terms of assets under management and represents a significant milestone for the Indian financial services industry on account of :

*  Being the largest FDI in a financial services company in India

*  Reinforcing confidence in India’s lending and financial services sector fundamentals and future growth potential

*  Strengthening SFL’s capital base and accelerating its growth trajectory

The proposed minority investment by MUFG Bank is subject to shareholder approval, regulatory clearances and customary closing conditions.

This collaboration combines SFL’s established domestic franchise and extensive distribution network with MUFG Banks’s global expertise and financial strength. The fund infusion will significantly enhance SFL’s capital adequacy, strengthen its balance sheet, and provide long-term growth capital. This collaboration is further expected to unlock synergies in technology, innovation, and customer engagement, driving sustainable growth. It will improve access to low-cost liabilities and potentially strengthen SFL’s credit ratings while aligning governance and operational practices with global best standards.

This investment reflects MUFG Bank’s confidence in India’s dynamic financial services sector. Mitsubishi UFJ Financial Group (MUFG), MUFG Bank’s parent entity, has a legacy of over 130 years in India, contributing USD 1.7 billion in investments and creating jobs approximately 5,000 people. The investment in SFL will be MUFG’s largest investment in India, reinforcing its commitment to financial inclusion and sustainable growth.

Umesh Revankar, Executive Vice Chairman, Shriram Finance Limited, said: "This transaction marks a defining moment in our growth journey. MUFG is one of the largest financial institution, with an extensive international network and strong values rooted in substantial growth and financial inclusion. The entry of MUFG as a key investor reinforces global confidence in India’s financial services sector and our role as a leader within it. Together, we aim to strengthen our capabilities, drive economic progress, and create meaningful impact across communities, building a future-ready institution anchored in trust and good governance.”

Hironori Kamezawa, Group Chief Executive Officer, Mitsubishi UFJ Financial Group stated, “MUFG is proud to enter into this transaction and become a strategic partner of Shriram Finance, one of India’s most respected financial institutions. MUFG and Shriram Finance share a common vision and aligned values for the future. Leveraging our global capabilities, MUFG is committed to supporting Shriram Finance’s growth and contributing to economic development, communities, and society in India.”

Transaction Advisors

*  MUFG Bank: KPMG India Corporate Finance (Lead Financial Advisor), J.P. Morgan (Financial Advisor), AZB & Partners (Legal Advisor), Nishimura & Asahi (Gaikokuho Kyodo Jigyo) (Legal Advisor)

*  Shriram Finance: Wadia Ghandy & Co. (Legal Advisor)

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