MUFG fortifies India play with $4.4 bn Shriram bet

Japanese bank to pick 20% stake in non-bank lender at over 16% premium

- Priyamvada C

MUFG Bank, a subsidiary of the Mitsubishi UFJ Financial Group (MUFG), is set to invest $4.4 billion (₹39,618 crore) for a 20% stake in Shriram Finance Ltd (SFL), marking one of the largest cross-border transactions this year and adding to the growing pipeline of India-Japan deals in recent months.

SFL, India's second-largest non-banking financial company (NBFC) by assets under management (AUM), announced the deal in a stock exchange filing on Friday. It said the fund infusion will enhance its capital adequacy, strengthen its balance sheet, and provide long-term growth capital.

The investment will be made through a preferential issuance of equity shares, the company said in the filing, adding that the collaboration is expected to unlock synergies in technology, innovation, and customer engagement, driving sustainable growth while improving access to low-cost liabilities.

KPMG and JPMorgan were the financial advisors to MUFG Bank. For SFL, Wadia Ghandy & Co. was the legal advisor.

FOREIGN FAITH

The purchase-at a company valuation of ₹1.98 trillion-comes at a premium of almost 16.5% to the ₹1.7 trillion market capitalization of SFL on Friday.