MUFG Bank, a consolidated subsidiary of Japan’s Mitsubishi UFJ Financial Group, has signed an investment agreement with India’s non-banking financial company (NBFC), Shriram Finance, to subscribe for a preferential allotment of 20% of the shares of Shriram Finance.
The total investment, valued at around Rs 396.2 billion (about $4.3 billion), 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.
Upon completion, Shriram Finance will become an equity subsidiary of Mitsubishi UFJ Financial Group and MUFG Bank.
MUFG said it plans to appoint two directors to the NBFC board.
MUFG Bank also signed an MoU on strategic collaboration with Shriram Finance. The proposed alliance aims to accelerate the growth of Shriram Finance through partnerships.
Founded in 1979, Shriram Finance claims to be India’s second largest retail NBFC by loan balance, with a nationwide network of nearly 3,200 branches, primarily 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, when its predecessor, Yokohama Specie Bank, opened a branch in Mumbai.
Currently, MUFG Bank operates in six locations across India and offers a range of banking services to corporate clients, including loans, deposits and foreign exchange.
By providing growth capital to the NBFC, MUFG aims to help drive expansion in new business vehicles and micro, small and medium enterprise (MSME) segments, while improving fundability and profitability through increased creditworthiness.
Through the proposed alliance, MUFG and Shriram Finance aim to bring together the client network and services of MUFG with the regional reach and established client base of Shriram Finance. The collaboration is expected to support the development of India’s road transport infrastructure and logistics sector, while 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.
“MUFG Bank to acquire 20% stake in India’s Shriram Finance for $4.3 billion” was originally created and published by Retail Banker International, a brand owned by GlobalData.
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