Shriram Finance stock hits record high after Japan's MUFG buys 20% stake for Rs 39,618 cr

Shares of Shriram Finance surged on Friday, scripting history as the stock surged to an all-time high following a mega-investment announcement. The non-banking financial company (NBFC) confirmed that Japan’s banking major, MUFG Bank, will acquire a 20 per cent stake in the company.

On Friday, shares of Shriram Finance gained 4.53 per cent to touch an all-time high of Rs 908.55 on the BSE, surpassing its previous close of Rs 869.20 apiece. At last check, the counter was trading 4.34 per cent higher at Rs 906.95. The aggressive buying interest came on the heels of the board’s approval of the preferential issuance to the Japanese lender.

In what is being touted as the "largest FDI in a financial services company in India", the Shriram Finance board approved the issuance of equity shares to MUFG Bank Ltd for an aggregate investment of Rs 39,618 crore (approximately USD 4.4 billion).

According to the exchange filing, the company will issue over 47.11 crore equity shares for Rs 840.93 per share. This preferential issue will result in MUFG Bank holding a 20 per cent stake in the post-issue share capital of the company on a fully diluted basis.

Umesh Revankar, Executive Vice Chairman of Shriram Finance, termed the transaction a ‘defining moment’ for the company, underscoring its strategic significance and long-term growth potential. “The entry of MUFG as a key investor reinforces global confidence in India's financial services sector and our role as a leader within it," Revankar said.

For MUFG, which has a 130-year legacy in India, this represents its largest investment in the country to date. Hironori Kamezawa, Group CEO of Mitsubishi UFJ Financial Group, said the two organisations are aligned in their long-term vision and core values, underscoring MUFG’s commitment to backing Shriram Finance’s growth ambitions and supporting broader economic development.