In a powerful signal of global confidence, Japanese financial titans are deploying billions of dollars into India's financial services sector, with two landmark deals announced this week. This surge of capital underscores India's position as a prime destination for international finance.
MUFG's Mega Bet on Shriram Finance
Mitsubishi UFJ Financial Group (MUFG) is poised to make one of the largest investments in India's financial history. The group is set to pump in over $4.4 billion (approximately Rs 40,000 crore) to acquire a stake exceeding 20% in Shriram Finance. The deal is expected to be finalized on Friday, following a board meeting of Shriram Finance to consider fundraising.
Currently, the promoters hold a 25.4% stake in the company, with the remainder held by the public. The news positively impacted the market, with Shriram Finance's shares closing 1.8% higher at Rs 864 on the BSE on Tuesday. According to sources, leaders from both financial giants are scheduled to meet top government officials in New Delhi on Monday. Furthermore, MUFG is reportedly lining up additional investments in the Indian market, viewing this minority stake as a gateway to a vast and expanding financial landscape.
Mizuho Acquires Controlling Stake in Avendus
In a parallel move highlighting the sector's attractiveness, Mizuho Securities announced on Wednesday the acquisition of a majority stake exceeding 60% in the Indian investment bank Avendus. The stake was purchased from KKR affiliate Redpoint Investments and the firm's co-founder, Ranu Vohra.
This transaction, valued at an estimated $525 million (around Rs 4,700 crore), had been in the works for several months and provides an exit for KKR. A press release clarified that Avendus will continue to be led by its founders, Gaurav Deepak and Kaushal Aggarwal, along with its existing leadership team. The firm will retain its brand identity while gaining strategic access to Mizuho's extensive global network and institutional reach.
A Trend of Major Global Investments
These Japanese investments are part of a significant wave of foreign capital entering the Indian financial services space. Earlier this year, Sumitomo Mitsui Banking Corporation (SMBC) acquired a 24.2% stake in Yes Bank. That deal included a 20% stake purchased for $1.6 billion from a consortium of domestic lenders led by the State Bank of India, which had previously bailed out the bank.
Similarly, the sector witnessed another major infusion when Emirates NBD Bank acquired a 60% stake in RBL Bank through a substantial investment of $3 billion. This consistent pattern of multi-billion dollar deals demonstrates the high growth potential international investors see in India's financial ecosystem, from retail finance to investment banking.
The combined force of these investments is set to reshape the competitive landscape, bringing in global capital, expertise, and networks to fuel the next phase of growth for India's financial services industry.
