Crisil Ratings has assigned a ‘Crisil AA+’ rating to Rs. 80,000 crore fixed deposit programme of Shriram Finance and placed it on ‘Rating Watch with Positive Implications’. The short term rating and commercial paper has been reaffirmed at ‘Crisil A1+’. This action follows Shriram Finance’s announcement of a significant investment from MUFG Bank, expected to boost capitalization and potentially lower borrowing costs. The rating may change by up to one notch upon resolution of the Watch.
Rating Upgrade on the Horizon
Crisil Ratings has assigned a ‘Crisil AA+’ rating to Shriram Finance’s Rs. 80,000 crore fixed deposit programme, placing it on ‘Rating Watch with Positive Implications’. This encompasses bank facilities and debt instruments. The short term rating is reaffirmed at ‘Crisil A1+’. The rating on subordinated debt of Rs 54.2 crore was withdrawn at the company’s request and on redemption.
MUFG Bank Investment Impact
A key driver is the pending investment of Rs 39,618 crore ($4.4 billion) by MUFG Bank, expected to significantly strengthen Shriram Finance’s capitalization, pushing net worth above Rs 1 lakh crore. This investment is expected to improve the company’s liability profile and reduce borrowing costs. Crisil Ratings will resolve the ‘Rating Watch’ after the transaction is consummated in 2026, with a potential one-notch rating change.
Key Financial Highlights
- Assets under management (AUM) stood at Rs 2,81,309 crore as of September 30, 2025.
- Networth reached Rs 60,404 crore with a gearing of 3.9 times as of September 30, 2025.
- Return on managed assets (ROMA) was 3.0% (annualized) during Q2 FY26.
- Reported net profit after tax was Rs 4,474 crore during H1 FY26.
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. Net Stage 3 was at 2.5% as of September 30, 2025. The company focuses on pre-owned CV financing and SME loans.
Resource Profile & Liquidity
Shriram Finance has diversified its resource profile, increasing the share of public deposits to 28% as of September 30, 2025. External commercial borrowings (ECB) accounted for 21% of overall borrowings. Unencumbered liquidity was Rs 16,550 crore as of September 30, 2025, sufficient to cover over three months of debt obligations.
Source: BSE
