Shriram Finance has secured overwhelming shareholder approval for its landmark partnership with Japan's MUFG, with shareholders backing all three key proposals related to the $4.40 billion deal that represents the largest cross-border investment in India's financial sector.

Comprehensive Shareholder Approval

The non-bank lender announced that its shareholders have approved three critical proposals enabling MUFG to acquire a 20% stake in the company. The voting results demonstrate exceptional confidence from the shareholder base in the strategic value of partnering with one of Japan's largest financial institutions.

Strategic Partnership Structure

Under the agreement signed last month, MUFG will acquire a 20% stake in Shriram Finance through the approved share issuance mechanism. The deal structure also includes governance provisions allowing MUFG to nominate directors to Shriram Finance's board, which received the highest approval rate of 99.50% from shareholders.

The partnership framework encompasses a one-time payment of $200.00 million by MUFG to Shriram Finance's ownership trust, demonstrating the comprehensive nature of the strategic collaboration between the Indian non-bank lender and the Japanese financial giant.

MUFG's India Expansion Strategy

MUFG has maintained operations in India for more than 130 years and has been expanding its presence in recent years. The Japanese financial group previously invested $565.00 million in digital lender DMI Finance, becoming its second-largest shareholder with a 20% stake.

The Shriram Finance partnership represents MUFG's largest investment in India's financial sector, highlighting the Japanese bank's commitment to the Indian market and its confidence in the country's financial services growth potential.

The strong voting margins across all three proposals provide clear validation of the partnership's strategic value and position the collaboration for successful implementation, subject to any outstanding regulatory approvals.

Shriram Finance Limited has received a fresh credit rating from CRISIL Ratings Limited for its fixed deposit programme. The rating agency assigned 'Crisil AA+/Watch Positive' rating to the company's ₹80,000 crore fixed deposit programme on January 14, 2026, as communicated to stock exchanges under Regulation 30 of SEBI Listing Regulations.

Strategic Investment Drives Rating Action

The rating assignment comes following Shriram Finance's significant corporate development announced on December 19, 2025. The company's Board of Directors approved definitive agreements with MUFG Bank Ltd for an investment of ₹39,618 crore ($4.40 billion) through preferential issue of equity shares.

MUFG Bank, Japan's premier bank with global operations across 50 countries, will gain special rights including board representation. The proposed transaction is expected to be consummated in 2026, subject to various regulatory and statutory clearances.

Comprehensive Rating Coverage

CRISIL's rating action extends beyond the fixed deposit programme, covering multiple debt instruments and facilities:

The rating agency has placed most long-term ratings on 'Rating Watch with Positive Implications' while reaffirming short-term ratings at 'Crisil A1+'.

Strong Market Position and Financial Metrics

Shriram Finance maintains its position as India's second-largest retail NBFC and third-largest non-bank financier. The company's diversified portfolio spans multiple segments:

The company's financial performance demonstrates robust fundamentals with assets under management of ₹2,81,309 crore as of September 30, 2025, compared to ₹2,63,190 crore as of March 31, 2025.

Capitalisation and Earnings Profile

Shriram Finance's capitalisation profile remains strong with healthy financial ratios:

The company reported net profit after tax of ₹4,474 crore during the first half of fiscal 2026, supported by stable credit costs of less than 2.00% and net interest margin of 8.80%.

Asset Quality Improvement

Shriram Finance has demonstrated consistent improvement in asset quality metrics. The Gross Stage 3 ratio remained stable at 4.60% as of September 30, 2025, compared to 5.50% as of March 31, 2024. The Net Stage 3 ratio improved to 2.50% from 2.70% during the same period.

Rating Outlook and Implications

CRISIL expects the MUFG Bank transaction to significantly benefit Shriram Finance's capitalisation profile, with networth expected to cross ₹1 lakh crore. The rating agency believes this will support the company's growth plans and improve its liability franchise through lower incremental borrowing costs. CRISIL indicated that upon resolution of the Rating Watch, the rating may change by up to one notch, suggesting potential for upgrade.