The Reserve Financial institution of India (RBI) has confirmed that Japan’s Mitsubishi UFJ Monetary Group (MUFG) would not require prior regulatory permission to take part within the Shriram Finance preferential difficulty, the corporate knowledgeable in an change submitting issued on Friday, 13 February.
In December final 12 months, Shriram Finance introduced a stake sale of 20% to MUFG which can contain a preferential issuance of fairness shares valued at ₹39,618 crores, topic to shareholder and regulatory approvals. The proposed transaction will mark the biggest overseas direct funding (FDI) in India’s monetary sector thus far, the corporate then acknowledged.
“We now have been knowledgeable by the Investor that the Reserve Financial institution of India (“RBI”) has confirmed that the Investor will not be required to acquire prior approval from the RBI for the Proposed Transaction,” the submitting posted by Shriram Finance learn.
In regards to the Shriram-MUFG deal
MUFG Financial institution’s funding in Shriram Finance is a strategic fairness stake moderately than a passive monetary curiosity. By the proposed transaction, Shriram Finance goals to reinforce steadiness sheet resilience when scale, liquidity, and danger administration have change into more and more vital within the Non-Banking Monetary Firm (NBFC) sector, it mentioned.
In the meantime, within the case of MUFGthe transaction will present publicity to certainly one of India’s most in depth retail and MSME lending franchises, constructed over many years throughout semi-urban and rural markets, Shriram Finance mentioned.
The $4.4 billion transaction has acquired approval from credit standing companies akin to Care Scores, ICRA, and Moody’s Scores, positioning the NBFC favourably to acquire low-cost borrowing.
Considerations raised by proxy advisers
Regardless of all the advantages highlighted by Shriram Finance, two distinguished proxy advisers have flagged considerations, Mint reported on 13 January 2026.
The NBFC is requesting shareholder approval for 3 resolutions, which embrace the issuance of 47.1 crore shares valued at ₹39,618 crore to MUFG by a preferential personal placement; granting particular controlling rights to MUFG Financial institution; and a one-time, non-recurring payout of $200 million from MUFG to promoter Shriram Possession Belief for non-compete and non-solicit commitments.
The resolutions acquired shareholders approval at a unprecedented normal assembly on 14 January.
Governance analysis agency Stakeholders Empowerment Companies (SES) has opposed all three proposals, whereas Institutional Investor Advisory Companies has opposed solely the third one. InGovern Analysis Companies, then again, has supported all resolutions to approve the deal.
What’s subsequent?
Following RBI’s nod, different approvals associated to the proposed transaction are pending, and the Firm will present additional updates as and when such approvals are obtained, the submitting mentioned.