Shriram Finance Approves INR 39617 Crore Fund Raise from MUFG Bank
Filing Summary
Shriram Finance Limited’s board has approved a fund raise of INR 39617 crore through a preferential issue of equity shares to MUFG Bank Ltd. This transaction involves the issuance of 471,121,055 equity shares at INR 840.93 each, representing 20% of the company’s post-issue share capital. The deal is subject to shareholder and regulatory approvals, including those from the Reserve Bank of India and the Competition Commission of India. An extraordinary general meeting is scheduled for January 14, 2026, to seek shareholder approval for the transaction and related matters.
Shriram Finance Limited has announced the approval of a significant fund raise amounting to INR 39617 crore from MUFG Bank Ltd. The board of directors approved the issuance of 471,121,055 fully paid-up equity shares at a price of INR 840.93 per share. This preferential issue will be conducted on a private placement basis, representing a 20% minority investment in the company’s post-issue share capital. The transaction is aligned with Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, and the Companies Act, 2013.
The financial terms of the transaction include a total consideration of INR 39617 crore, with the subscription price set at INR 840.93 per share, including a premium of INR 838.93 per share. The funds will be raised through cash consideration, with the investor required to pay the full subscription amount at the time of allotment. The floor price for the equity shares has been determined in accordance with SEBI regulations.
Operationally, the issuance of shares will result in MUFG Bank Ltd. holding a 20% stake in Shriram Finance on a fully diluted basis. The transaction will classify MUFG Bank as a public shareholder. The board has also approved the execution of an investment agreement and a cooperation memorandum of understanding with MUFG Bank, outlining the terms and conditions of the preferential issue and potential business collaborations.
The timeline for the transaction includes an extraordinary general meeting scheduled for January 14, 2026, where shareholders will vote on the preferential issue and related matters. The relevant date for the issue of equity shares is set as December 15, 2025. The completion of the transaction is contingent upon obtaining necessary approvals from shareholders and regulatory bodies, including the Reserve Bank of India and the Competition Commission of India.
The parties involved in this transaction include Shriram Finance Limited, MUFG Bank Ltd., Shriram Ownership Trust, and Shriram Capital Private Limited. MUFG Bank, incorporated under Japanese law, will become a significant minority shareholder in Shriram Finance. The investment agreement grants MUFG Bank certain rights, including the ability to nominate up to two non-independent directors to the board, subject to maintaining a minimum shareholding threshold.
The market context for this transaction involves Shriram Finance’s strategic move to enhance its capital base through a substantial investment from a foreign bank. This aligns with the company’s objectives to strengthen its financial position and explore new business opportunities. The transaction is part of a broader strategy to engage with international investors and expand its operational capabilities.
Shriram Finance Limited is a prominent player in the Indian financial services sector, focusing on providing a range of financial products and services. The company is committed to expanding its market presence and enhancing shareholder value through strategic partnerships and capital investments.