In one of 2025’s largest potential deals in the non-banking financial services (NBFC) sector, Japan’s Mitsubishi UFJ Financial Group (MUFG) is in advanced talks to acquire a 20% stake in Shriram Finance Limited, India’s largest vehicle financier. According to sources familiar with the matter, a deal announcement could happen soon.
The proposed investment is valued at $3.5–4 billion (approximately ₹33,000–35,000 crore) and will involve a fresh capital infusion into Shriram Finance. If finalized, this transaction will mark a significant milestone in India’s NBFC landscape, reflecting strong global investor confidence in the group — especially after Piramal Group’s exit in 2023.
MUFG’s Strategic Move and Board Representation
The deal is expected to give MUFG two board seats in Shriram Finance as nominee directors. Additionally, Parag Sharma, currently the company’s MD and CFO, is likely to succeed YS Chakravarthi, who will retire next month after a long tenure as the top executive.
Sources also indicate that Subhashri Shriram, MD & CEO of Shriram Capital, which holds a 17.83% stake in Shriram Finance, is likely to join the board as part of the ongoing restructuring.
This strategic partnership is expected to bring financial strength and operational synergy, allowing Shriram Finance to expand its lending capacity in the fast-growing vehicle finance sector.
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MUFG May Raise Stake Further
After acquiring the initial 20% stake, MUFG will have the first right to participate in future capital raises, potentially enabling it to increase its ownership up to 51% over time.
The transaction is likely to be priced between ₹760–₹780 per share, according to insiders. Over the past month, Shriram Finance shares have surged 21%, significantly outperforming the BSE Sensex’s 3.4% return during the same period.
Official Response and Industry Buzz
While the market is abuzz with speculation, Shriram Finance’s official spokesperson stated, “There was nothing on the table at the company’s board meeting on October 31 regarding the MUFG deal.”
During a recent interaction with CNBC-TV18, Umesh Revankar, Executive Vice-Chairman of Shriram Finance, mentioned that NBFCs regularly explore fundraising opportunities, calling capital their “raw material.” He clarified that only confirmed and concrete proposals are brought before the board for approval.
A Sign of Renewed Investor Interest
If completed, this would be a landmark deal for India’s financial sector in 2025, showcasing renewed investor interest in the Shriram Group following Piramal’s exit. It also highlights MUFG’s growing commitment to India’s lending ecosystem, especially in the high-potential vehicle finance space.
The Economic Times was the first to report on the ongoing discussions between MUFG and Shriram Finance earlier on October 1, 2025.
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