Shriram Finance (SHFL IN) – Event Update – MUFG buys 20% stake in SHFL – BUY
Published on 19 Dec 2025
Japanese lender MUFG Bank is investing Rs 396.2 bn in Shriram Finance through preference shares, at a post-money valuation of 1.8x P/B. The transaction will significantly strengthen Shriram Finance’s capital base, improve its balance sheet resilience and provide long-term growth capital to support expansion across lending segments. We expect CRAR to see a boost of ~15% with the equity infusion (Exhibit 1) with SHFL on track for a rating upgrade. While RoE is likely to be subdued at ~12% in FY28E, RoA remains intact at 3.1%. We keep our multiple unchanged at 2.2x Sep-27 P/ABV and maintain BUY with a revised TP of Rs 1,060.
