Following the recent strategic investment by MUFG Bank Ltd in , credit rating agencies Crisil Ratings, ICRA and India Ratings & Research have upgraded the long-term credit rating for Bank loan facilities, Non-Convertible Debentures, Subordinated Debt, and Fixed Deposit Programmes of SFL to “AAA with a Stable outlook” from the earlier “AA+”.
The credit rating agencies also resolved the ratings from ‘Watch with Positive Implications’. MUFG Bank recently acquired a 20 per cent equity stake via preferential issue of equity shares in SFL on a fully diluted basis, with a total investment of ₹39,618 crore.
Umesh Revankar, Executive Vice Chairman, SFL, said: “The MUFG partnership has been a pivotal moment, and these rating upgrades are a reflection of that. For us, it translates directly into lower borrowing costs and a stronger ability to serve our customers.”
Crisil Ratings, in a note, said the rating action considers the significantly strengthened capital profile of SFL with networth crossing ₹1 lakh crore post the transaction (₹62,093 crore as on December 31, 2025) which will support the company’s growth plan over the medium term.
“Moreover, while Shriram Finance continues to benefit from its experienced board, as part of the agreement, MUFG Bank has got rights to nominate up to two non-independent directors on the board. This should enable the company to leverage MUFG Bank’s experience across various facets including technology and compliance,” the agency said.
Furthermore, the association with MUFG Bank should also benefit Shriram Finance’s liability franchise through access to funds at lower cost, it added.
Crisil Ratings has noted that the company’s incremental cost of borrowings has already seen some benefit post the announcement of the transaction. This, with the benefit of reduction in leverage to 2.5 times (4.1 times as on December 31, 2025), is expected to provide a fillip to profitability over the near to medium term, it added.
The agency said the overall ratings also factor in Shriram Finance’s market leadership in the non-banking financial company (NBFC) ecosystem and healthy earnings profile.
Shriram Finance reported overall assets under management (AUM) of ₹2,91,709 crore as on December 31, 2025, with net profit after tax of ₹7,003 crore and return on managed assets (RoMA) of 3.0 per cent (annualised) during the first nine months of fiscal 2026. Crisil Ratings opined that these strengths are partly offset by average, though improving asset quality.