Japan's Mitsubishi UFJ Financial Group, Inc. (MUFG) To Buy 20% Share In India's Shriram Finance For $4.4 Billion

Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) is among the Growth Stock Portfolio: 12 Stock Picks By Ken Fisher. 

Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) of Japan will pay $4.4 billion for a 20% share in India’s Shriram Finance Ltd., the largest cross-border investment in the country’s financial market.

The deal surpasses Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG)’s previous investments of over $1.7 billion, making it the company’s largest commitment in India. As per Shriram Finance, the Indian insurance company, regulatory approvals are required for the deal. Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) has been awarded minority protection rights, such as the right to recommend up to two non-independent directors to the board and the right to retain its shareholding in advance. These rights expire if the company’s stake drops below 10% on a fully diluted basis. Furthermore, the business will be paying Shriram Ownership Trust a single $200 million non-compete and non-solicit fee, subject to shareholder approval.

The investment comes after India’s central bank recently clarified regulations for banks to own stock in non-banking financing firms. Masashige Nakazono, a Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) executive, stated that the share could be raised above 50% at any time as long as regulations allow it. According to Shriram Finance, the deal will promote a diverse liability base and better credit ratings. It will also strengthen the firm’s balance sheet, improving its capital adequacy ratio and providing long-term growth capital. The Indian company claimed 2.8 trillion rupees ($31 billion) in assets under management as of the end of September. After the announcement, Shriram Finance’s shares ended the day up by 3.7%.

Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) is Japan’s largest banking firm, accounting for 8.4% of domestic loans and 11.8% of deposits as of March 2025.

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