Big Japanese bet! MUFG pumps ₹40,000 crore into Shriram Finance, shares jump 4%

Under the deal, MUFG will acquire a 20% stake in Shriram Finance, India’s second-largest non-banking financial company (NBFC).

The transaction is being seen as the largest foreign direct investment (FDI) in India’s financial sector to date, highlighting growing global investor confidence in the country’s financial services space.

The investment comes after MUFG’s earlier attempt to acquire a $2 billion stake in HDB Financial Services, the NBFC arm of HDFC Bank, failed to materialise.

The Shriram Finance deal also underscores the surge in Japanese investments in India in recent years, particularly in the banking and financial services sector.

Shriram Finance Ltd is one of India’s leading non-banking financial companies (NBFCs), with a strong presence in retail lending across commercial vehicles, two-wheelers, MSME loans, gold loans and consumer finance.

The company was formed in 2022 following the merger of Shriram Transport Finance Company and Shriram City Union Finance, creating a diversified lending platform with a nationwide footprint.

Headquartered in Chennai, Shriram Finance serves a large base of underbanked and self-employed customers, particularly in semi-urban and rural markets. It is regarded as one of the largest retail-focused NBFCs in the country.

Mitsubishi UFJ Financial Group (MUFG) is Japan’s largest banking group and among the biggest financial institutions globally, with operations spanning banking, asset management, leasing and securities. MUFG has been steadily expanding its presence in India, viewing the country as a key long-term growth market.