Shriram Finance’s long-term rating has been placed on ‘Rating Watch with Positive Implications’ by CRISIL, following the announcement of a ₹39,618 crore investment by MUFG Bank. MUFG Bank will acquire a 20% stake in Shriram Finance. The short-term rating is reaffirmed at ‘Crisil A1+’. The transaction is expected to close in 2026 and significantly boost Shriram Finance’s capitalisation.
Rating Update and Rationale
CRISIL Ratings has placed Shriram Finance’s long-term bank facilities and debt instruments on ‘Rating Watch with Positive Implications’ following an announcement on December 19, 2025 regarding a proposed investment by MUFG Bank Ltd.
Details of MUFG Bank Investment
MUFG Bank is set to invest ₹39,618 crore ($4.4 billion) in Shriram Finance through a preferential issue of equity shares. Post-transaction, MUFG Bank will hold a 20% stake in Shriram Finance. This investment is subject to regulatory and statutory approvals and is expected to be completed in 2026.
Expected Benefits
The investment is anticipated to significantly bolster Shriram Finance’s capitalisation, with net worth expected to exceed ₹1 lakh crore. CRISIL Ratings projects that it will also lower borrowing costs and improve profitability. MUFG Bank will also have the right to nominate up to two non-independent directors to the Board of Shriram Finance.
Key Rating Strengths
Shriram Finance continues to demonstrate market leadership in the NBFC sector with assets under management (AUM) of ₹2,81,309 crore as of September 30, 2025. The company’s capitalisation remains healthy with a networth of ₹60,404 crore and gearing of 3.9 times as of September 30, 2025. Return on managed assets (RoMA) was 3.0% (annualised) during H1 FY26. The reported net profit after tax was ₹4,474 crore during the first half of fiscal 2026.
Asset Quality
The Gross Stage 3 (GS3) ratio improved to 4.6% as of September 30, 2025, compared to 5.5% as of March 31, 2024. This improvement is credited to low slippages and high reductions, including write-offs.
Resource Profile
Shriram Finance continues to diversify its resource profile, including an increase in public deposits from 24% as of March 31, 2025 to 28% as of September 30, 2025. External commercial borrowings (ECB) also contribute to diversification, accounting for 21% of overall borrowings.
Source: BSE
