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What is the story about?
Shares of Shriram Finance Ltd
. will be in focus on Tuesday, December 30, after the non-bank lender received its first credit rating upgrade following the announcement of its deal with Japan's MUFG.
CARE Ratings has upgraded the credit rating on Shriram Finance's non convertible debentures and subordinate debt worth ₹2,500 crore to "CARE AAA; Stable" from "CARE AA+; Stable".
The upgrade factors in recent developments, including the company's operational and financial performance during FY25 and the first half of FY26.
The rating agency has also reaffirmed the top short term rating of "CARE A1+" on the company's commercial paper programme aggregating ₹7,500 crore.
Management had earlier told CNBC TV18 that the rating upgrade is expected to meaningfully lower the company's cost of funds.
Shriram Finance expects its cost of funds to decline by nearly 100 basis points over the next 1.5 to 2 years. The company's current calculated cost of funds stands at 8.7%.
Japan's MUFG will acquire a 20% stake in Shriram Finance for $4.4 billion. The deal marks MUFG's biggest commitment in India, surpassing its $1.7 billion investments in previous years.
"There's a chance we may push our stake above 50%. The regulations allow for acquiring over 50%. So naturally it's a possibility at an appropriate time," said Masashige Nakazono, executive officer at MUFG Bank and head of the global commercial banking planning division.
CARE Ratings has upgraded the credit rating on Shriram Finance's non convertible debentures and subordinate debt worth ₹2,500 crore to "CARE AAA; Stable" from "CARE AA+; Stable".
The upgrade factors in recent developments, including the company's operational and financial performance during FY25 and the first half of FY26.
The rating agency has also reaffirmed the top short term rating of "CARE A1+" on the company's commercial paper programme aggregating ₹7,500 crore.
Management had earlier told CNBC TV18 that the rating upgrade is expected to meaningfully lower the company's cost of funds.
Shriram Finance expects its cost of funds to decline by nearly 100 basis points over the next 1.5 to 2 years. The company's current calculated cost of funds stands at 8.7%.
Japan's MUFG will acquire a 20% stake in Shriram Finance for $4.4 billion. The deal marks MUFG's biggest commitment in India, surpassing its $1.7 billion investments in previous years.
"There's a chance we may push our stake above 50%. The regulations allow for acquiring over 50%. So naturally it's a possibility at an appropriate time," said Masashige Nakazono, executive officer at MUFG Bank and head of the global commercial banking planning division.
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