MUFG Bets Big On India’s Credit Market With Shriram Finance Deal

Japan’s largest bank, Mitsubishi UFJ Financial Group (MUFG), has taken a bold step into India’s financial services sector by acquiring a significant stake in Shriram Finance Ltd. The deal, valued at approximately Rs 39,620 crore, represents one of the biggest cross-border investments in India’s non-banking financial company (NBFC) space. It highlights MUFG’s strategic pivot toward high-growth markets like India, as Japanese banks seek opportunities beyond their domestic economy.  

Key highlights from the announcement include  

• MUFG will acquire a 20% stake in Shriram Finance Ltd through preferential allotment of equity shares.  
• The investment is valued between $4.3–4.45 billion, making it the largest FDI in India’s financial services sector.  
• Shriram Finance confirmed the deal in a BSE filing, noting that MUFG will nominate two directors to its board.  
• The transaction comes amid a surge in deal-making in India’s financial sector, with over Rs 415 billion worth of deals struck in 2025.  
• MUFG’s move reflects Japan’s broader “India pivot,” as its banks look to escape negative interest rates and demographic stagnation at home.  
• Shriram Finance, one of India’s largest NBFCs, specializes in retail lending, vehicle finance, and small business loans, making it a strong partner for MUFG’s expansion strategy.  
• Industry experts suggest the deal could pave the way for eventual majority acquisition, strengthening MUFG’s long-term presence in India.  

The investment underscores India’s growing appeal as a destination for global capital, particularly in credit markets where demand for retail and SME financing continues to rise. For MUFG, the partnership with Shriram Finance offers both scale and reach, aligning with its ambition to become a leading player in Asia’s financial services landscape.  

Sources: Economic Times, Domain-B, GoodReturns, MUFG Official Release