More Details on This News

Shriram Finance Limited has announced that CRISIL Ratings Limited has placed its ratings on the company's Long-Term Bank Facilities and Debt Instruments on ‘Rating Watch with Positive Implications’. Concurrently, CRISIL has reaffirmed its ‘Crisil A1+’ Rating on the Short-Term Bank Facilities and Commercial Paper of the Company.

Upon the company's request and following their redemption, CRISIL has withdrawn its ratings on Non-Convertible Debentures amounting to ₹2,769.5 crore and Long-Term Principal Protected Market Linked Debentures worth ₹30 crore.

The rating action is a consequence of Shriram Finance's announcement on December 19, 2025, regarding the Board of Directors' approval to enter into definitive agreements with MUFG Bank Ltd for an investment of ₹39,618 crore ($4.4 billion) through a preferential issue. This investment will result in MUFG Bank holding a 20% stake in Shriram Finance on a fully diluted basis and grant them special rights, including the nomination of up to two non-independent directors. The transaction is subject to regulatory and statutory clearances and is expected to be consummated in 2026.

CRISIL anticipates that this transaction will significantly bolster Shriram Finance's capitalization profile, with its net worth projected to exceed ₹1 lakh crore, supporting its medium-term growth plans. Furthermore, the investment is expected to enhance the company's liability franchise by lowering incremental borrowing costs and improving profitability. CRISIL will continue to monitor the situation and resolve the Rating Watch post-transaction consummation.

The ratings continue to reflect Shriram Finance's market leadership in the NBFC sector, with Assets Under Management (AUM) of ₹2,81,309 crore as of September 30, 2025. The company maintained healthy capitalization with a net worth of ₹60,404 crore and a gearing of 3.9 times as of the same date. Its earnings profile remains robust, evidenced by a return on managed assets (RoMA) of 3.0% (annualised) in the first half of fiscal 2026, with a reported net profit after tax of ₹4,474 crore for the same period. The company's asset quality metrics have shown improvement, with a Gross Stage 3 (GS3) ratio of 4.6% as of September 30, 2025. The resource profile is diversified and improving, with public deposits increasing to 28% as of September 30, 2025.