Shares of scaled to a fresh high, leading the pack on Monday, after Mitsubishi UFJ Financial Group’s (MUFG) announcement to acquire a 20 per cent stake in the for about ₹39,600 crore, the largest foreign direct investment in India’s financial services sector.
Brokerages widely upgraded their outlooks and raised target prices, citing strengthened capital adequacy, improved funding profile and enhanced growth prospects following the tie-up with MUFG.
Analysts described the deal as a solid vote of confidence that could pave the way for balance-sheet improvement, potential credit-rating upgrades and lower cost of funds, reinforcing a positive medium-to-long-term trajectory for the stock.
On the trading floor, Shriram Finance’s stock surged to multi-week highs and consistently featured among the biggest gainers on the benchmark index as investors digested the implications of the MUFG investment and the attendant optimism from brokerages.
The share price hit fresh highs not seen in months, reflecting broad buying interest. Market participants noted that the deal — subject to shareholder and regulatory approvals — not only deepens the company’s capital base but also positions it for accelerated growth across key lending segments.
Global brokerages Nomura and Jefferies have increased the target prices to ₹1,140 and ₹1,080, respectively, maintaining buy calls. CLSA maintained an outperform rating at a target price hiked to ₹1,030 from ₹840.
Delving into brokerage reviews, PL Capital, which assigned buy at ₹1,060, emphasised the scale and strategic nature of MUFG’s equity infusion, forecasting a significant boost to capital adequacy that could underwrite future expansion and possibly trigger a rating upgrade.
The firm maintained its positive stance with an elevated target price, underscoring improved balance-sheet resilience and long-term growth potential.
Motilal Oswal reiterated buy at ₹1,100 target price, emphasising that MUFG’s investment is expected to support the company’s next phase of growth by providing long-term capital to accelerate expansion across core segments, including CV and MSME lending, while strengthening balance sheet resilience through enhanced creditworthiness and funding capacity.
At 10.06 am, it traded at ₹935.70, up 3.7 per cent. The stock soared to a fresh high of ₹937.70 on the NSE, after opening at ₹919 against the previous close of ₹901.70.