MUFG Bank to acquire 20% stake in India’s Shriram Finance for $4.3bn

Group 1: Investment Agreement - Mitsubishi UFJ Financial Group's subsidiary MUFG Bank has signed an investment agreement to acquire a 20% equity stake in Shriram Finance, valued at approximately Rs396.2 billion (about $4.3 billion), pending regulatory approval [1][2] - The agreement involves major shareholders of Shriram Finance, including Shriram Ownership Trust and Shriram Capital Private Limited, and will make Shriram Finance an equity method affiliate of MUFG [2] Group 2: Strategic Collaboration - MUFG Bank has also signed a memorandum of understanding for a strategic collaboration with Shriram Finance aimed at accelerating growth through partnerships [3] - The collaboration intends to leverage MUFG's client network and services alongside Shriram Finance's regional reach and established customer base, supporting the development of India's road transport infrastructure and logistics sector [6] Group 3: Company Background and Focus - Shriram Finance, established in 1979, is the second largest retail non-banking financial company (NBFC) in India by loan balance, with nearly 3,200 branches primarily in rural and semi-urban areas [3] - The company specializes in commercial and passenger vehicle loans, with a strong presence in the used vehicle loan segment [4] Group 4: MUFG's Objectives - By providing growth capital, MUFG aims to enhance Shriram Finance's funding capacity and profitability, particularly in the new commercial vehicles and micro, small, and medium enterprises (MSMEs) segments [5] - MUFG Bank has been operating in India since 1894, offering a range of banking services to corporate clients [4]