'MUFG's infusion of capital will cut cost of funds by 50-100 bps'

ON December 19, Umesh Revankar, executive vice-chairman of Shriram Finance, along with the founders of the Chennai-based Shriram Group, has set a record by bringing in the largest foreign direct investment into the domestic financial services sector by selling 20% stake, by way of preferential allotment of fresh equities, to the leading Japanese banking group Mitsubishi UFJ Financial Group (MUFG) for $4.4 billion or ₹39,618 crore.

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Revankar tells Benn Kochuveedan that the entry of MUFG Bank will strengthen Shriram Finance's capital base, improve its balance sheet resilience and provide long-term growth capital to support business expansion across all lending segments. Excerpts:How will the partnership with Mitsubishi UFJ Bank change working of the company? Hope you will continue to lead the company.

We will have a long-term vision because large capital is coming in, and they being a very good partner, you can think for the long-term. That's how I view it. Yes, of course, I will continue to lead the company. They have no demand for a change in leadership or something like that.

With this transaction, what will be the incremental core capital coming into the company? How much can it be used to leverage for fresh lending or business expansion?