Shriram Finance Limited announced that CARE Ratings Limited has reaffirmed or assigned new ratings to its various debt instruments as of February 16, 2026. The highest rating, CARE AAA; Stable, was assigned/reaffirmed across major facilities, including Bank Facilities (₹50,000 crore) and Non-Convertible Debentures. Commercial Paper was reaffirmed at CARE A1+, reflecting sustained strong financial health and market position.
Credit Rating Updates Announced
Shriram Finance Limited (SFL) has provided an update regarding the credit ratings assigned to its debt instruments by CARE Ratings Limited, effective February 16, 2026. This follows a previous intimation on February 13, 2026.
Key Rating Actions Summary
The rating agency has reaffirmed or assigned ratings across the company’s key instruments, detailed as follows:
- Long-Term/Short-Term Bank Facilities (₹50,000 Crore): Rating CARE AAA; Stable / CARE A1+ assigned.
- Non-Convertible Debentures (₹7,631.12 Crore): Rating CARE AAA; Stable assigned.
- Non-Convertible Debentures (₹2,368.88 Crore): Rating CARE AAA; Stable reaffirmed.
- Long-term instruments (reduced from ₹156.10 Crore to ₹101.90 Crore): Rating CARE AAA; Stable reaffirmed.
- Fixed Deposit: Rating CARE AAA; Stable reaffirmed (Ongoing amount).
- Commercial Paper (₹7,500 Crore): Rating CARE A1+ reaffirmed.
Additionally, CARE Ratings withdrew ratings on certain sub-ordinated debt instruments due to their redemption upon maturity.
Rationale for Strong Ratings
The ratings are driven by SFL’s sustained leadership in the used commercial vehicle (CV) financing segment and diversification post-amalgamation with SCUF. Key strengths noted include:
- Market Position: Second-largest deposit-taking NBFC focused on retail lending in India.
- Capitalization: Comfortable, supported by a sizeable net worth and capital accretion from the housing subsidiary divestment.
- Earnings Profile: Strong, backed by healthy net interest margins and improved asset quality leading to healthy return ratios.
- Product Diversification: Successful merger created a multi-product, pan-India franchise spanning CVs, passenger vehicles, MSME, and gold loans.
- Liquidity: Strong, supported by sizeable on-balance sheet liquidity and high Liquidity Coverage Ratio (LCR) of 334.93% for Q3 FY26.
Key Rating Monitorables
Sustained improvement in asset quality and profitability, maintenance of comfortable capitalization, and continued moderation in credit spreads remain key going forward. The potential 20% equity stake acquisition by MUFG is viewed as a positive development enhancing global funding access and governance.
Financial Highlights (Consolidated)
As per the press release data:
- Assets Under Management (AUM) reached ₹291,709 crore as of 9MFY26 (UA).
- Return on Managed Assets (ROMA) was 3.08% for 9MFY26 (annualised).
- Capital Adequacy Ratio (CAR) stood at 20.27% as of December 31, 2025.
- On-book gearing improved to 4.05x as of December 31, 2025.
Source: BSE
