India’s financial services industry is seeing record inflows of foreign direct investment

On December 19, Shriram Finance, India’s second-largest NBFC, said it has entered into a definitive agreement with Japan’s largest lender MUFG Bank, under which the latter will acquire a 20 percent stake in the NBFC for ₹39,618 crore | Photo credit: iStockphoto

Shriram Finance-MUFG deal

On December 19, Shriram Finance, India’s second-largest NBFC, said it has entered into a definitive agreement with Japan’s largest lender MUFG Bank, under which the latter will acquire a 20 percent stake in the NBFC for ₹39,618 crore. This is the largest ever direct investment in an Indian financial services company. Experts said this deal could see MUFG gradually acquire a controlling stake in Shriram, strengthen the NBFC’s creditworthiness and help the company grow faster with the opportunity to increase operating leverage.

RBL Bank-Emirates NBD deal

In October, India’s mid-market private lender RBL Bank announced that it has signed a definitive agreement for Emirates NBD Bank to acquire a 60 percent stake in RBL through a primary infusion of ₹26,850 crore. In a conversation with bbusiness lineAccording to the bank’s CEO R Subramaniakumar, RBL aims to join the league of big banks with this deal. The lender aims to further scale up its operations across retail, corporate finance, trade finance, digital, cards and microlending segments. It sees great synergies with ENBD in export-import and international activities, he said.

Deal between the Federal Bank and Blackstone

Another big deal took place in October when the Federal Bank board sold about 10 per cent stake to the Blackstone group for ₹6,196.51 crore.

YES Bank-SMBC deal

In May, Japan’s Sumitomo Mitsui Banking Corporation (SMBC) agreed to acquire a 20 percent stake in Yes Bank for $1.6 billion. SMBC later acquired a further 4.99 percent in YES Bank in September. YES Bank received a rating upgrade upon completion of the transaction and aims to tap SMBC’s corporate customers to meet their non-loan financial services needs, CEO Prashant Kumar said. business line.

IDFC First Bank deal with Warburg Pincus, ADIA

In April, IDFC FIRST Bank said it will raise up to ₹75 billion from affiliates of private equity group Warburg Pincus and sovereign wealth fund Abu Dhabi Investment Authority (ADIA) through the issuance of warrants, which if fully converted will give investors a combined 15 percent stake in the bank.

Sammaan Capital-ADIA deal; Mannapuram Finance-Bain Capital Deals

In October, Abu Dhabi’s IHC said it will invest $1 billion in NBFC Sammaan Capital to acquire a controlling stake in the lender. While major gold lender NBFC Manappuram Finance said in March that Bain Capital will inject $508 million into the NBFC to gain joint control of the company.

“The deal (between Shriram and MUFG) indicates that global banks are increasingly preferring to partner with or acquire scaled, well-governed NBFC platforms rather than pursuing capital-intensive and time-consuming greenfield banking licenses in India. It is likely to accelerate consolidation in the NBFC sector as large, well-capitalized players gain funding and capital cost advantages, while smaller and sub-scale NBFCs face increasing funding pressures and margin compression,” said Pratik Shah, partner and national financial services leader, EY India.

Published on December 19, 2025