Shriram Finance has received board approval for a major fundraising transaction with MUFG Bank Ltd., involving the preferential issue of equity shares worth ₹39,617.98 crores. The board meeting held on December 19, 2025, approved the strategic investment that will give MUFG a 20% stake in the financial services company.

Board Meeting Outcomes

The board of directors approved several key resolutions during their meeting, which commenced at 10:00 AM and concluded at 11:55 AM:

Transaction Structure

The preferential issue involves the allotment of 471.12 million fully paid-up equity shares of face value ₹2.00 each to MUFG Bank Ltd. The floor price was determined in accordance with SEBI ICDR Regulations, with the relevant date set as December 15, 2025.

Special Rights and Governance

The board approved granting specific minority protection rights to MUFG, subject to shareholder approval:

Additionally, MUFG will receive pre-emptive rights to maintain pro-rata shareholding and may second up to 6 personnel to the company over time. These rights will cease if MUFG's shareholding falls below 10% on a fully diluted basis.

Non-Compete Agreement

MUFG will pay a one-time non-compete and non-solicit fee of USD 200.00 million to Shriram Ownership Trust, subject to public shareholder approval under Regulation 26(6) of the Listing Regulations. This payment ensures separation of lending business interests and protects all shareholders' interests.

Regulatory Approvals and Timeline

The transaction is subject to multiple approvals:

Strategic Restructuring Intent

The company disclosed that its promoter, Shriram Capital Private Limited, has recorded an in-principle intent to explore restructuring options relating to the separation of its lending/credit business from other business interests. This preliminary exploration is subject to detailed evaluation and regulatory compliance, with no final decisions taken at this stage.

Shriram Finance Limited recorded a substantial block trade on the National Stock Exchange (NSE), highlighting significant institutional trading activity in the financial services sector.

Block Trade Details

The transaction involved a considerable volume of shares and represents one of the notable institutional trades in the market. The following table summarizes the key parameters of the block trade:

Market Significance

Block trades typically indicate institutional investor activity and can signal significant portfolio adjustments by large investors, mutual funds, or other institutional entities. The transaction price of ₹860.80 per share provides insight into the valuation at which institutional investors are willing to transact in Shriram Finance shares.

About the Transaction

The block trade represents a substantial monetary value of ₹91.17 crores, making it a noteworthy transaction in the financial services space. Such large-volume trades are often executed through block deal mechanisms to minimize market impact while facilitating significant position changes by institutional investors.

The execution of this block trade demonstrates continued institutional interest in Shriram Finance, reflecting the company's position in the financial services sector and its appeal to large-scale investors.