Japan’s Mitsubishi UFJ Financial Group (MUFG) is poised to make a strategic investment of over $4 billion to acquire roughly a 20% stake in India’s leading non-bank financial company, Shriram Finance, according to sources familiar with the deal. The transaction is expected to be finalized on Friday, December 19, 2025.

MUFG and Shriram Finance have not officially commented on the investment, citing confidentiality, though Shriram Finance notified Indian stock exchanges that its board will meet on Friday to review and approve a funding proposal.

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MUFG’s Global Expansion Strategy

This investment is part of a broader trend among Japanese financial institutions seeking growth opportunities abroad, amid challenges in their domestic market, where population aging and demographic decline limit expansion. India has emerged as a prime target due to its rapid economic growth, expanding middle class, and increasing demand for retail and commercial financing.

Other recent Japanese investments in India include:

• Sumitomo Mitsui Financial Group (SMFG) acquiring a 24.2% stake in Yes Bank, starting with a 20% purchase for $1.6 billion in May 2025.
• Mizuho Securities acquiring a majority stake in Indian investment bank Avendus from U.S. firm KKR for up to 81 billion yen ($523 million).

The Shriram Finance deal is notable for its scale, with sources estimating the total investment could reach $4.3 billion (approximately 390 billion Indian rupees), exceeding earlier reports of $3.2 billion.

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About Shriram Finance

Shriram Finance is among India’s largest retail non-banking financial companies (NBFCs), providing credit solutions for commercial vehicles, cars, scooters, and personal loans. As of September 2025, the company reported assets under management of 2.8 trillion Indian rupees ($31 billion), underscoring its significant footprint in India’s financial services sector.

This partnership with MUFG is expected to strengthen Shriram Finance’s capital base, expand lending capacity, and support further growth in India’s vehicle financing and consumer credit markets.

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Implications for Investors and the Market

The MUFG-Shiram Finance investment highlights:

• Increasing Japanese investment in emerging markets, particularly India.
• Confidence in India’s non-banking financial sector and retail lending potential.
• A strategic diversification move for MUFG, providing exposure to a fast-growing economy compared with Japan’s mature domestic market.

Financial analysts believe the deal could pave the way for further cross-border partnerships between Japanese banks and Indian NBFCs, strengthening bilateral financial ties and boosting liquidity in India’s lending ecosystem.