Shriram Finance on Friday, Feb. 13, informed in a regulatory filing to the stock exchanges that Japan's MUFG Bank does not require a prior approval from the Reserve Bank of India (RBI) to acquire a 20% stake. "We have been informed by the investor that the RBI has confirmed that the investor is not required to obtain prior approval from the RBI for the proposed transaction," said India's second-largest retail NBFC in its exchange filing.
''Other approval(s) in relation to the proposed transaction are awaited and the company will provide further updates with respect to the same, as and when such approvals are received,'' added Shriram Finance in its statement. MUFG has proposed two directors to be appointed on the board of Shriram Finance as nominees of the investor following the acquisition of a 20 per cent stake by the Japanese bank.
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Morihiko Fuji and Shinichi Fujinami would be appointed on the board to satisfy the applicable 'fit and proper' criteria for appointment as directors of the company, Shriram Finance said in another regulatory filing. The appointment would be subject to receipt of written approval from the RBI and consummation of the proposed issuance and allotment of specific shares of Shriram Finance to the MUFG, it said.
MUFG-Shriram Finance Deal
In December, Japan's Mitsubishi UFJ Financial Group (MUFG) had announced that it will invest nearly Rs 40,000 crore or $4.5 billion for a 20% stake in Shriram Finance Ltd, marking the largest strategic investment by a foreign lender in India's non-banking financial company (NBFC) sector. According to the deals of the transaction, Japan's MUFG will acquire 47.1 crore shares at a floor price of Rs 840.93 per share.
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"The Board of Directors of Shriram Finance Ltd (SFL) at their meeting held today approved entering into definitive agreements with MUFG Bank Ltd. for an investment of Rs 39,618 crore ($4.4 billion ) in SFL through a preferential issuance of equity shares. This investment will result in MUFG Bank acquiring a 20.0 % stake on a fully diluted basis," said the NBFC in a regulatory filing to the stock exchanges on Friday, Dec. 19, 2025.
As part of the deal, Japan's MUFG will subscribe to 47.1 crore shares at Rs 840.93 per share, which is a 5% discount to the current market price (CMP) of Rs 898. After the stake acquisition by Japan's MUFG Bank, Shriram Finance's promoter stake will come down to 20.3% from 25.4%.
Additionally, the existing public shareholder stake will dilute to 59.7% from 74.6% after the deal. Post the fund infusion, the book value increases to Rs 425.2 per share from Rs 321 per share, which is a growth of 32%. At a floor price of Rs 841, this translated to a price-to-book value of 2.1x. The investment will be made through a preferential issuance of equity shares.
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