Shriram Finance is expected to more than double in about three-and-a-half years, said its Executive Vice Chairman, Umesh Revankar, after securing a long‑awaited strategic partnership with Japan’s Mitsubishi UFJ Financial Group (MUFG). The deal, which will infuse nearly Rs 40,000 crore ($4.4 billion) into the NBFC, is aimed at strengthening capital buffers, lowering borrowing costs, and supporting the NBFC’s next phase of expansion.
Revankar’s statement
“The partnership is the culmination of a two‑year global search,” said Revankar, who began exploring strategic options when the company realised that its promoter shareholding structure—at around 25%—limited its ability to raise capital through repeated equity issuances. “The choice was either to rely only on internal accruals or to bring in a strong partner with similar beliefs and a long-term view,” he said. “We travelled to Japan and Korea to meet potential partners, but while Korean institutions lacked the scale and cultural alignment Shriram Finance sought, Japanese banks stood out for their long-term approach, respect for local management autonomy and deep experience in retail lending across Asia,” stated Revankar.
The timing also proved favourable. SMBC was showing interest in YES Bank, and MUFG had recently walked away from the HDB Finance deal, creating an opening for a large, strategic investment in India’s retail lending space. Revankar said, “MUFG emerged as the most suitable partner not only because of its financial strength but also because of its like‑mindedness and willingness to support Shriram Finance’s entrepreneurial culture without day‑to‑day interference.” Revankar hopes that the deal is finalised before March (FY2026).
Revised long-term growth plan
With the partnership now in place, the company has revised its long-term growth plan. Its earlier 2030 vision assumed a 15% annual growth rate, but with MUFG’s backing, Shriram Finance has raised its internal projection to 18–20%, a pace that would allow the company to double its assets under management (AUM) in just three-and-a-half years. As of September 30, the NBFC’s AUM stood at Rs 2.81 lakh crore,
Revankar believes India’s economic momentum—particularly if GDP growth remains in the 7.8–8% range—provides ample opportunity to sustain this accelerated expansion. The capital infusion will significantly strengthen the company’s balance sheet and is expected to reduce its cost of funds by up to 100 basis points over time, especially if the partnership leads to a credit rating upgrade.
“Lower borrowing costs will help Shriram Finance retain existing customers, attract better-quality borrowers and improve long-term returns,” said Revankar. With quarterly disbursements of nearly Rs 50,000 crore, the company sees no challenge in deploying the additional capital, instead, the focus is on deepening its presence in underserved markets and enhancing operational efficiency. Despite the scale of the partnership, Shriram Finance has reiterated that it has no intention of converting into a bank, emphasising that its core strength lies in asset-backed lending to individuals and small operators, a segment that traditional banks often overlook.
MUFG’s global expertise in digital capabilities, risk management and international fundraising is expected to complement Shriram Finance’s strong domestic franchise. As part of its expansion strategy, the company plans to convert its 600 rural centres into full-fledged branches and open 100–150 new branches per year.