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

Japan’s Mitsubishi UFJ Financial Group’s consolidated subsidiary MUFG Bank has signed an investment agreement with India’s non-banking financial company (NBFC) Shriram Finance to subscribe to a preferential allotment of 20% equity shares in Shriram Finance.

The total investment, valued at around Rs396.2bn (about $4.3bn), is subject to regulatory approval.

The investment agreement was reached between MUFG Bank, Shriram Finance, and its major shareholders, Shriram Ownership Trust and Shriram Capital Private Limited. 

Following completion, Shriram Finance will become an equity method affiliate of Mitsubishi UFJ Financial Group as well as MUFG Bank.

MUFG said that it plans the appoint two directors to the NBFC’s board.

MUFG Bank has also signed a memorandum of understanding regarding a strategic collaboration with Shriram Finance. The proposed alliance aims to expedite Shriram Finance’s growth via partnerships.

Established in 1979, Shriram Finance claims to be the second largest retail NBFC in India by loan balance, with a nationwide network of nearly 3,200 branches, mainly in rural and semi-urban regions.

The company focuses on commercial and passenger vehicle loans, with a “strong presence” in the used vehicle loan segment.

MUFG Bank’s presence in India dates back to 1894, with its predecessor, Yokohama Specie Bank, opening a branch in Mumbai.

Currently, MUFG Bank operates in six locations across India, offering a range of banking services to corporate clients, including loans, deposits, and foreign exchange.

By offering growth capital to the NBFC, MUFG aims to assist in driving expansion in new commercial vehicles and micro, small, and medium enterprises (MSMEs) segments, while improving funding capacity and profitability through enhanced creditworthiness.

Via the proposed alliance, MUFG and Shriram Finance intend to bring together MUFG’s client network and services with Shriram Finance’s regional reach and established customer base. The collaboration is expected to support the development of India’s road transport infrastructure and logistics sector, while also contributing to progress in financial inclusion.

In May 2025, MUFG and MUFG Bank signed a multi-year partnership with Sakana AI to integrate AI into the bank’s operations.

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