Mitsubishi to buy 20% in Shriram Fin for $4.4 billion

New Delhi: Japanese financial services giants are placing mega bets on India.

Mitsubishi UFJ Financial Group is all set to pump in over $4.4 billion (around Rs 40,000 crore) to acquire an over 20% stake in Shriram Finance, with the deal likely to finalised on Friday. The transaction will be among the biggest in the financial services space.

MUFG and Shriram Finance could not be reached for comment. On Tuesday, Shriram Finance informed stock exchanges that its board will meet Friday to consider raising funds through a rights issue, preferential allotment of shares, QIP or through other permissible modes. Currently, the promoters hold a 25.4% stake in Shriram Finance, with the rest held by the public. The financial services company’s shares closed 1.8% higher at Rs 864 on BSE.

Leaders from the two financial services companies are due to meet top govt functionaries in the Capital on Monday, said people in the know. MUFG is lining up further investments in India, they added, without disclosing further details. The minority stake in Shriram Finance will give access to a large and growing market.

On Wednesday, Mizuho Securities also announced the acquisition of over 60% stake in Avendus from KKR affiliate Redpoint Investments and the firm’s co-founder and executive vice chairman Ranu Vohra. The transaction, that has been in the pipeline for several months, is estimated at around $525 million (Rs 4,700 crore) and provides KKR with an exit.

“Avendus will continue to be led by founders Gaurav Deepak and Kaushal Aggarwal, along with the firm’s experienced leadership team, ensuring continuity of vision and strategic direction as the firm enters its next phase of growth. The firm will retain its brand and identity, while gaining strategic access to Mizuho’s scale, institutional network, and global reach,” a press release said.

Earlier this year, Sumitomo Mitsui Banking Corporation had acquired 24.2% in Yes Bank this year, which included a 20% stake for $1.6 billion from domestic lenders led by State Bank of India, that had bailed out the Indian entity.

The Indian financial services sector is seeing large global interest, with Emirates NBD Bank acquiring 60% in RBL Bank through an infusion of $3 billion.