New Delhi, Dec 19 (PTI) Japan’s Mitsubishi UFJ Financial Group Inc (MUFG) will acquire a 20 per cent minority stake in non-bank lender Shriram Finance Ltd for Rs 39,618 crore (around USD 4.4 billion),
marking the largest cross-border investment in India’s financial sector to date.
MUFG will pick up the minority stake through preferential equity shares, Shriram Finance said in a statement.
The signing of definitive agreements with MUFG Bank reinforces confidence in India’s lending and financial services sector fundamentals and future growth potential, the statement said, adding that it will also strengthen SFL’s capital base and accelerate its growth trajectory.
The proposed investment by MUFG Bank is subject to shareholder approval, regulatory clearances and customary closing conditions, it said.
“This collaboration combines SFL’s established domestic franchise and extensive distribution network with MUFG Bank’s global expertise and financial strength. The fund infusion will significantly enhance SFL’s capital adequacy, strengthen its balance sheet, and provide long-term growth capital,” it said.
This partnership is further expected to unlock synergies in technology, innovation, and customer engagement, driving sustainable growth, it said.
The partnership will also improve access to low-cost liabilities and potentially strengthen SFL’s credit ratings while aligning governance and operational practices with global best standards, it added.
Earlier in October, Emirates NBD Bank, the second-largest in the UAE, expressed interest in acquiring a 60 per cent majority stake in RBL Bank for Rs 26,853 crore.
This investment reflects MUFG Bank’s confidence in India’s dynamic financial services sector, it said, adding the investment in SFL will be MUFG’s largest investment in India.
Mitsubishi UFJ Financial Group (MUFG), MUFG Bank’s parent entity, has a legacy of over 130 years in India, having invested USD 1.7 billion and created approximately 5,000 jobs.
SFL executive vice chairman Umesh Revankar said, “MUFG is one of the largest financial institutions, with an extensive international network and strong values rooted in substantial growth and financial inclusion. 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.” Upon completion of the investment, Shriram Finance will become an equity-method affiliate of both MUFG and MUFG Bank, and MUFG plans to appoint two directors to Shriram Finance’s board.
MUFG Group CEO Hironori Kamezawa said, “Shriram Finance share a common vision and aligned values for the future. Leveraging our global capabilities, MUFG is committed to supporting Shriram Finance’s growth and contributing to economic development, communities, and society in India.” Asia is MUFG’s second home market, and within the region, India stands out as one of the most important markets globally, expected to become the world’s third-largest economy by 2030. MUFG’s journey in India began in 1894 with the setup of the Mumbai branch of Yokohama Specie Bank, a predecessor of The Bank of Tokyo.
MUFG now covers all of India through six locations, delivering comprehensive banking services to corporate clients, including deposits, loans, and domestic and foreign exchange transactions.
Strengthening this presence, MUFG became the first Japanese bank to open a branch in GIFT City, enabling us to support international transactions and meet diverse funding needs for clients.
Reinforcing its commitment to India’s growth story, MUFG launched the USD 300 million Ganesha Fund in 2022 to support the growth of startups and, in 2023, invested in DMI Finance Private Ltd, a non-banking financial institution providing digital financial services in India, to further strengthen the retail digital lending space. PTI DP DRR
