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Mitsubishi UFG Finance is in advanced talks to claim a 20% stake in Shriram Finance for $3.5 - 4 billion.
Mitsubishi UFJ is a Japanese financial company that provides services like investment banking, trust, securities, asset management etc.
While Shriram Finance is a non-banking finance company that offers loans for commercial and passenger vehicles, gold loans, loans for MSMEs, and farm equipment.
FYI: if the deal falls through, it will be one of the biggest in the NBFC services space in 2025.
The deets: the development is likely to cause a shakeup in the management of the Shriram Finance with MUFG directors getting a seat at its board.
Besides, MUFG will also gain the first right to buy Shriram’s shares whenever the company wants to raise capital from the public markets. Thus by purchasing more shares, MUFG can eventually raise its stake to 51%.
Why this matters: the deal highlights rising global interest in India’s financial ecosystem. From Emirates - RBL to Blackstone - Federal Bank, partnerships in 2025 alone are worth $15 billion. Once tightly controlled by the government, the sector is now opening up with relaxed FDI norms signaling strong confidence from policymakers.
Add to that, India’s booming digital payments network and a vast untapped population, both major draws for global banks. By teaming up with local financial institutions, these players gain instant access to an established customer base and a fast-growing economy eager for expansion.
