Shriram Finance Ltd expects its cost of funds to decline by around 1% over the next 18 months following a significant capital infusion from Japan's Mitsubishi UFJ Financial Group (MUFG). According to reports from Mint, MUFG completed the acquisition of 20% stake in the NBFC for ₹39,618 crore in April 2026, after the deal was first announced in December 2025. The non-bank plans to use about 50% of the proceeds to restructure its liabilities and the remaining to push lending in existing segments.
The capital infusion has led rating agencies to upgrade the company's debt rating to 'AAA' from 'AA+', which is also expected to help reduce funding costs. As reported by Mint, executive vice chairman Umesh Revankar stated that the company doesn't want to raise any funds, at least for the next six months. The company's cost of funds will be lower because it won't need to raise capital for the next few quarters. Shriram Finance had total borrowings of ₹2.5 trillion as at the end of March, with public deposits accounting for the highest share at 27.7%, followed by term loans at 20.4%.
According to Mint reports, the areas of focus on the lending side will be growing the new-vehicle loan book, both passenger and commercial vehicles. Revankar noted that a lot of demand is emerging from the company's existing borrowers who were using second-hand vehicles and are now upgrading to new vehicles for personal or commercial use. He expects vehicle and gold loans to continue to drive growth, even as the company has become cautious about loans to medium, small, and micro enterprises (MSMEs). The company is seeing some amount of stress in the MSME segment due to uncertainty arising from the West Asia war and its impact on global supply chains.
As reported by Mint, Shriram Finance posted a consolidated net profit of ₹3,014 crore, up 19.5% quarter-on-quarter and 40.9% year-on-year. Net interest income for the reporting quarter was ₹6,994 crore, higher by 3.4% sequentially and 15.6% year-on-year. Net interest margin (NIM) improved to 8.61% from 8.58% in the previous quarter and 8.25% in the corresponding quarter of the previous year. Assets under management (AUM) of the lender rose 3.6% on-quarter and 14.9% year-on-year to ₹3.02 trillion as of 31 March.
According to Mint reports, the company's gross stage 3 assets ratio worsened marginally to 4.58% from 4.54% a quarter ago and 4.55% a year ago, while the net stage 3 assets ratio at 2.33% was slightly better than 2.38% in the previous quarter and 2.64% in the previous year. The marginal decline in asset quality was largely due to rising delinquencies in the construction equipment portfolio and MSME loans, which were attributed to delayed payments from some government projects. Gold loan delinquencies rose to 2.29% from 2.21% in the third quarter and 2.06% year ago, though Revankar noted the book is seeing robust growth with strong repayment trends.
