Shriram Finance promoters, including Shriram Capital Private Limited and related entities, have announced the creation of encumbrance on their holdings. This follows a shareholders’ agreement with MUFG Bank Ltd., which imposes specific transfer restrictions on shares held by the promoter group. These contractual limitations are effective from April 08, 2026, and are designed to align with the terms of the strategic partnership between the involved parties.
Details of Shareholder Agreement
Shriram General Insurance Company Limited, on behalf of the promoter group, has confirmed the implementation of transfer restrictions regarding shares held in Shriram Finance Limited. These restrictions affect several entities, including Shriram Capital Private Limited, Shriram Value Services Limited, Shriram Ownership Trust, Sanlam Life Insurance Limited, and Sanlam Emerging Markets (Mauritius) Limited.
Nature of Transfer Restrictions
The agreement, which came into effect on April 08, 2026, mandates that for a period of three years, the involved entities cannot transfer their shares in the target company, barring specific permitted transactions. Post this initial period, any sale of shares remains subject to a right of first offer available to MUFG Bank Ltd. Furthermore, specific provisions apply to the Sanlam-affiliated entities, prohibiting share transfers for one year.
Impact and Conditions
These restrictions are a foundational component of the broader arrangement with MUFG Bank Ltd. and are intended to provide stability to the shareholding structure of Shriram Finance. A critical clause in the agreement stipulates that these transfer restrictions will automatically cease to apply should the shareholding of MUFG Bank Ltd. and its affiliates fall below the 10% threshold of the total share capital on a fully diluted basis.
Source: BSE
