MUFG Bank says it will not increase Shriram Finance’s stake beyond 20%

MUFG recently agreed to invest ₹39,618 crore to acquire a 20 percent stake in the NBFC, marking the largest foreign direct investment in the Indian BFSI sector | Photo credit: THOMAS PETER/Reuters

“I think this is just the beginning (of assessing return on investment), but we do believe that they (Shriram Finance) have a good business model and with the backing of a large strategic investor like MUFG, I think the growth can be further accelerated,” he said, adding that the lender has no plans to increase its stake in Shriram Finance beyond 20 percent.

His comments come in the wake of Shriram Finance entering into definitive agreements with MUFG Bank for an investment of ₹39,618 crore ($4.4 billion) to acquire a 20 percent stake in the NBFC through a preferential share issue. This transaction is touted as the largest FDI in India’s growing BFSI space.

Bank conversion

Joshi said it is up to the board and executives of Shriram Finance to decide whether the NBFC wants to convert into a bank. “That is a decision that Shriram has to make. We are not a promoter in Shriram, we are an investor, and that is a decision that the board of directors of Shriram has to make,” he said, adding that apart from appointing two nominated directors to the board of Shriram Finance, MUFG Bank does not plan to appoint any key management personnel at the NBFC to oversee its day-to-day operations.

Furthermore, with MUFG joining Shriram Finance as a strategic investor, the latter’s access to Japanese markets to raise funds will increase. “Once the transaction is approved and completed, the fact that MUFG is a major investor should help the company gain deeper access to Japanese markets, which they have done in the past anyway,” he said.

MUFG Bank currently has approximately $20 billion exposure to the Indian market, primarily in wholesale, and will continue to focus on doing business with major Indian companies.

“It is the trade corridor between India and Japan that is growing. We have seen a lot of interest from a variety of sectors in Japan, from food, cosmetics and real estate, and we see with the current geopolitical landscape and strong government relationships that this will only accelerate. We as the largest bank in Japan and with our significant presence in India, we are only well placed to capture that,” he said.

Published on December 22, 2025