Newsletter
Shriram Finance shares ended in the green after reports said Japan’s Mitsubishi UFJ Financial Group (MUFG) is close to buying a minority stake in the gold financier.
What’s going on: MUFG is reportedly planning to invest around nearly $3.2 billion to acquire nearly 20% stake in Shriram Finance. Talks are said to be at an advanced stage, with a deal possibly wrapping up as early as this week.
Why it matters: MUFG’s interest is largely strategic as India is one of the fastest-growing credit markets globally, and MUFG wants deeper exposure beyond corporate banking.
By investing in Shriram Finance, it gets instant access to a scaled retail lending franchise, especially in gold loans, vehicle finance, and MSME credit. These are the segments growing faster than traditional bank loans.
Shriram also brings reach where global banks can’t easily go. Its deep presence in semi-urban and rural India gives MUFG distribution, customers, and data that would take years to build organically.
Big theme: India’s secured lending engines including gold loans and vehicle finance are on a strong growth trajectory.
Outstanding gold loans crossed ₹3.3 lakh crore in FY25, more than doubling over the past few years, as households increasingly tap gold for quick, collateral-backed credit.
The organised gold loan market (banks + NBFCs) is expected to scale up to ₹15 lakh crore by FY26, driven by high gold prices, faster disbursals, and rising preference for secured borrowing.
Vehicle finance is also expanding steadily, with the market valued at $26.5 billion in 2024 and projected to reach $52 billion by 2033, helped by demand for used vehicles and credit penetration beyond metro cities.
