MUFG eyes 20% in Shriram Fin for $5 bn

Shriram Finance's board will also mull fundraising routes such as a rights issue, preferential allotment or QIP

- Priyamvada C. & Sneha Shah

Deal could value Shriram Finance at $22-25 billion and is likely to be a primary fundraise through fresh share issuance.

Japan's Mitsubishi UFJ Financial Group (MUFG) is in talks to invest $4.5-5 billion for a 20% stake in Shriram Finance Ltd, people familiar with the development said, in what could rank among the largest cross-border transaction involving India this year.

"The deal is expected to be larger than the earlier planned with about a $4.5-4.7 billion investment," one of the people said, adding Shriram Finance's board is likely to meet on Friday to discuss the exact structures. A second person said it could touch $5 billion with the transaction valuing the company at $22-25 billion.

"The fundraise is expected to be a primary in nature with a fresh issuance of shares," a third person said.

Shriram Finance and MUFG did not reply to Mint's requests for a comment.