Mitsubishi UFJ Financial Group (MUFG) is in the final stages of negotiating a 20% equity stake in Indian non‑bank financial company Shriram Finance, with the transaction valued at more than 500 billion yen (about $3.22 billion). The deal marks MUFG’s first major foray into India’s consumer‑finance market and signals a broader strategy to diversify revenue streams beyond Japan’s low‑interest‑rate environment.
The stake would give MUFG a foothold in a rapidly expanding segment of India’s financial services industry. Shriram Finance’s portfolio is heavily weighted toward retail and commercial vehicle financing, which together account for roughly half of its assets under management. By partnering with MUFG, Shriram could leverage the Japanese bank’s global distribution network and capital resources to accelerate digital platform development and cross‑border lending initiatives.
Shriram Finance has posted strong growth in recent years, reporting FY23 revenue of ₹30,476.78 crore and a net profit of ₹6,020 crore, up from ₹19,255 crore and ₹2,721 crore in FY22. The company’s market capitalization stood at about ₹1.6 trillion as of December 12, 2025, reflecting a 39% increase over the prior year. The potential sale of a minority stake may provide Shriram with additional working capital and a strategic partner that can help it scale its retail and SME lending businesses amid increasing competition from fintech entrants.
The deal is still subject to regulatory approvals and a definitive agreement, but MUFG has indicated that an agreement could be reached within the week. The valuation of over 500 billion yen aligns with market expectations for a 20% stake in a company of Shriram’s size and growth trajectory, and it is consistent with MUFG’s recent investments in Indian fintech firms such as DMI Finance and HDB Financial Services.
Market reaction to the news was positive, with Shriram Finance’s shares rising between 0.76% and 2.7% on the day of the announcement. Analysts noted that the deal underscores MUFG’s commitment to the Indian market and could enhance Shriram’s access to international capital and technology, potentially boosting investor confidence in the company’s long‑term growth prospects.
The transaction represents a strategic win for both parties: MUFG gains exposure to a high‑growth consumer‑finance market and a proven distribution network, while Shriram Finance secures a capital partner that can support its expansion plans and strengthen its competitive position against other NBFCs and fintech challengers. The deal also reflects a broader trend of Japanese banks seeking overseas growth opportunities in response to a shrinking domestic market and persistently low interest rates.
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