A preferential issue of equity shares from Japan’s MUFG Bank to raise Rs 39,617.98 crore has been approved by Shriram Finance. With the investment, MUFG will have a fully diluted 20% share in the business. In Friday’s trading, Shriram Finance’s share price increased by almost 5%. The largest FDI inflow into the financial services industry is expected to come from this transaction.
Following today’s board meeting, the business disclosed the information. 47.11 crore fully paid-up equity shares for Rs 840.93 per share, including a premium of Rs 838.93 per share, will be issued to raise the funds.
MUFG will be considered a public shareholder following the acquisition. The business made it clear that Shriram Finance won’t lose control as a result of the transaction. Subject to public shareholder approval, the Board authorized MUFG to pay Shriram Ownership Trust a $200 million one-time non-compete and non-solicit charge.
Shareholder approval and regulatory clearances, notably those from the Reserve Bank of India and the Competition Commission of India, are prerequisites for the transaction.
In Friday’s trading, the share price of Shriram Finance increased by around 2.82%. The company has made 52.9% so far this year on a year-to-date basis.
