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Shriram Finance Limited (SFL) has received an upgrade in its credit ratings from CARE Ratings Limited. The long-term instruments and Non-Convertible Debentures have been upgraded to CARE AAA; Stable from CARE AA+; Stable. The Commercial Paper rating has been reaffirmed at CARE A1+.

CARE Ratings has also assigned a new rating of CARE AAA; Stable to SFL's Fixed Deposit Programme. These upgrades reflect SFL's sustained leadership in the used commercial vehicle financing segment, diversification across products and geographies post the merger with Shriram City Union Finance Limited (SCUF), strong market position as the second-largest deposit-taking NBFC focused on retail lending, and comfortable capitalization. The ratings also factor in SFL's strong earnings profile, diversified funding profile, and robust liquidity position.

The press release from CARE Ratings dated December 31, 2025, highlights the rationale for the upgrade, including synergies from the SCUF merger, a diversified liability franchise, and strong financial flexibility. The agency views the potential 20% equity stake acquisition by MUFG as a positive development that will further enhance SFL's financial flexibility and strategic linkages.

Key rating drivers supporting the upgrade include SFL's established franchise, well-diversified funding profile, strong and resilient earnings, and comfortable capitalization. The company's AUM stood at ₹2,81,309 crore as of September 30, 2025. SFL's management team, including Executive Vice Chairman Umesh Revankar and MD & CEO Parag Sharma, continues to drive the company's growth and strategy. Despite inherent risks associated with its borrower profile and the cyclical nature of the CV segment, SFL has demonstrated improving asset quality and a strong liquidity position.