Shriram Finance refutes MUFG 20% stake reports

Shriram Finance on Wednesday denied reports claiming Mitsubishi UFG Financial Group (MUFG) plans to acquire a 20% stake for $2.6 billion, calling them “rumour and speculation.” The company said the day’s rise in its share price on BSE and NSE is purely market-driven, adding that management has no control or knowledge of the reasons behind the movement.

The said news and similar reports published today in certain mainstream media outlets are based on rumour and speculation, said the company in an exchange filing.

Earlier, reports suggested that MUFG is in advanced talks to acquire a 20% stake in Shriram Finance, India’s second-largest non-banking finance company (NBFC), for approximately ₹23,200 crore ($2.6 billion).

The promoters own 25.39% of Shriram Finance, the bulk of which is held through group holding company Shriram Capital, which has a 17.85% stake. The rest is owned by the public and institutional shareholders, including the government of Singapore (5.41%) and Monetary Authority of Singapore (1.2%).

Shriram Capital is owned by Shriram Ownership Trust and Sanlam of South Africa. Shriram Capital also has a stake in the parent’s insurance joint venture with Sanlam.

Shriram Finance had total assets under management (AUM) of Rs 2.72 lakh crore at the end of the June quarter, up 17% from the year earlier. In the private sector, that’s second only to Bajaj Finance with AUM of Rs 4.41 lakh crore. It has close to 10 million customers across vehicle finance, MSME loans, personal loans and gold loans.

Meanwhile, MUFG, which has owned a fifth of Wall Street investment bank Morgan Stanley since 2008, has been backing another Indian NBFC, DMI Finance, since April 2023.

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