NBFC stock jumps 5% after Japan’s MUFG Bank to invest ₹39,618 Cr in the company

Synopsis: Japan’s Mitsubishi UFJ Financial Group will invest Rs 39,618 crore in an Indian NBFC through a preferential issue of equity shares that would let them hold a 20 percent stake in the target company.

An NBFC firm in the business of commercial vehicle financing saw its stock surge by 5 percent soon after the company officially announced that Japan’s MUFG (subsidiary of Mitsubishi UFJ Financial Group)  will be investing Rs 39,618 crore into the firm . With a market cap of Rs 1,68,203 Cr Shriram Finance Ltd saw its stock hit an intraday high of Rs 914.1  which is 5 percent higher than the previous close of Rs 869.2 .

What’s the News?

On Friday Shriram Finance announced that the company has attracted a landmark investment from Mitsubishi UFJ Financial Group via its banking subsidiary MUFG Bank. The company plans to invest Rs 39,618 crore (US Dollar 4.4 billion) through a preferential equity issue, acquiring a 20 percent stake on a fully diluted basis. 

This transaction is the largest FDI investment in India’s financial services sector and significantly strengthens Shriram Finance’s capital base, balance sheet and long-term growth prospects. Subject to shareholder and regulatory approvals, the partnership combines Shriram Finance’s strong domestic franchise and wide distribution network with MUFG’s global expertise and financial strength. The fund infusion is expected to improve capital adequacy, access to low-cost funding and unlock synergies in technology, innovation, governance and customer engagement, reinforcing Shriram Finance’s leadership as India’s second-largest retail NBFC with AUM exceeding Rs 281 lakh crore.

Business & Financial Overview

Established in 1979, Shriram Transport Finance Company Ltd, part of the Shriram Group, is a leading deposit-taking NBFC focused on financing pre-owned and new commercial vehicles, mainly trucks. The company has a wide reach with 3,225 branches, apart from several rural centres and partnerships with private financiers which  ensure strong presence across urban and rural markets.

In the latest quarter Shriram Finance saw a YoY revenue growth of 18 percent, going from Rs 10,090 Cr in Q2FY25 to Rs 11,912 Cr in Q2FY26, while the QoQ went up by 3.2 percent from Rs 11,536 Cr in Q1FY25.

The YoY Net Profits growth is at 7.4 percent, going from Rs 2,153 Cr in Q2FY25 to Rs 2,314 Cr in Q2FY26, while the QoQ growth stood at 7 percent from Rs 2,159 Cr in Q1FY25.

Written by Adithya Menon

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