MUFG to acquire 20% stake in Shriram Finance for ₹39,618 crore

Core Insights - Shriram Finance Limited (SFL) has approved a significant investment of ₹39,618 crore (USD 4.4 billion) from MUFG Bank, resulting in MUFG acquiring a 20% stake in SFL, which is India's second-largest retail Non-Banking Financial Company (NBFC) by assets under management (AUM) [1][2] Investment Details - This investment represents the largest Foreign Direct Investment (FDI) in a financial services company in India and MUFG's largest investment in the country [2] - SFL's AUM exceeds ₹2.81 lakh crore, indicating a strong financial position [2] Strategic Collaboration - The collaboration is expected to enhance SFL's access to low-cost liabilities, strengthen its credit ratings, and align its governance and operational practices with global standards [4] - The fund infusion will significantly improve SFL's capital adequacy, strengthen its balance sheet, and provide long-term growth capital [5] Growth Vision - Umesh Revankar, Executive Vice Chairman of SFL, emphasized that this transaction marks a pivotal moment in SFL's growth journey, highlighting MUFG's extensive international network and commitment to financial inclusion [7] - The entry of MUFG as a key investor is seen as a reinforcement of global confidence in India's financial services sector and SFL's leadership role within it [8] Economic Impact - Hironori Kamezawa, Group CEO of Mitsubishi UFJ Financial Group, stated that MUFG and SFL share a common vision for future growth and economic development in India [8] - MUFG has a legacy of over 130 years in India, having invested USD 1.7 billion and created approximately 5,000 jobs, showcasing its long-term commitment to the Indian market [9]