Shriram Finance shareholders greenlight MUFG’s $4.4 billion stake, $200 million SOT payment, and board nominations

Shareholder approvals cement MUFG Shriram Finance partnership

At the extraordinary general meeting, Shriram Finance secured majority shareholder approval for MUFG’s investment and associated resolutions, advancing a landmark cross-border deal. The transaction India’s largest financial sector FDI includes equity infusion, governance rights, and a one-time payment to SOT, amid active debate from proxy advisors on deal structure and oversight clauses.

Key highlights

• Stake acquisition: Approval for MUFG to acquire a 20% stake via preferential issue, totaling approximately ₹39,618 crore (~$4.4 billion).
• SOT payment: One-time $200 million payment to Shriram Ownership Trust received shareholder nod.
• Board nominations: MUFG granted rights to nominate non-independent directors to Shriram Finance’s board.
• Strategic significance: Marks the largest FDI in India’s financial services sector, strengthening capital base and global partnerships.
• Proxy advisory context: Mixed scrutiny on non-compete and oversight clauses; majority approvals reflect investor support for long-term value creation.

Sources: Moneycontrol; Business Standard; Reuters via Zawya